Amidst the Copper Tariff Storm: Who is at the Center and the Global Impact

On July 30 (U.S. time), a market-shaking decree was signed by U.S. President Trump, imposing a 50% tariff on imported semi-finished copper products and copper-rich derivatives, effective from August 1. This decision covers a wide range of items, from copper tubes and pipes, copper wire, copper billets, and copper plates, to fabricated products such as pipe fittings, cables, connectors, and electrical components. The move immediately drew the attention of experts and caused significant disruptions in the global metals market.

Data Analysis and Direct Impact

To better understand the impact of this tariff policy, we need to look at U.S. import and export data. According to an SMM (Shanghai Metals Market) analysis, in 2024, the total U.S. imports of semi-finished copper products, copper cables, and copper winding wire reached 1.9047 million tons, while exports were only 754,200 tons. Notably, copper cables and winding wire accounted for the majority of imports, at 1.33 million tons.

The 50% tariff will directly increase import costs, driving up the price of semi-finished copper products and related goods in the U.S. According to SMM analysts, “this increase in tariff costs is expected to lead to a significant decline in the total global flow of semi-finished copper products into the U.S.” This trend has already started to become apparent with the drop in import-export transactions from January to May 2025.

Who is at the Center of the Storm?

According to U.S. customs data, the largest suppliers of semi-finished copper products, copper cables, and copper winding wire to the U.S. are not China, but two neighboring countries: Canada and Mexico. Specifically, Canada and Mexico account for 30.9% and 63.77% of the imports of these products, respectively. In contrast, China’s share is only 4.24% and 3.1%.

These figures indicate that Canada and Mexico are the two countries that will be most directly and heavily impacted by this tariff policy. However, the existence of the United States-Mexico-Canada Agreement (USMCA) could provide a theoretical “cushion.” This agreement allows products that meet the “rules of origin” to enjoy a zero-tariff rate.

However, as expert John Smith, an economist at the Institute for International Trade Studies, commented, “while USMCA provides a legal framework, the ambiguity in its enforcement and the ‘targeted’ nature of the U.S. tariff policy could still expose Canadian and Mexican businesses to significant risks.” He also suggested that these companies might be forced to adjust their export strategies, reducing volume or increasing prices to offset the tariff costs.

For China, the direct impact in the short term is considered limited due to its relatively low export share of these products to the U.S. However, an indirect impact could occur. “The shift in trade flows could disrupt the global copper supply chain,” according to an expert at Wood Mackenzie. “If products from Mexico and Canada cannot enter the U.S. market, they may be diverted to other markets, especially Southeast Asia, creating competitive pressure for Chinese manufacturers.”

Goals and Challenges of U.S. Policy

The goal of this tariff is clearly to promote domestic production and investment in downstream processing sectors. However, SMM analysts suggest that this goal may face many challenges. “The U.S. is at a crucial stage of its energy transition and electrification, which requires a large volume of semi-finished copper,” an SMM report states. “The current domestic copper production capacity of the U.S. is unlikely to meet this demand in the short term.”

Furthermore, the increase in import tariffs will push up production costs for downstream processing industries in the U.S., thereby exacerbating the already tense supply-demand situation. Financial expert Mark Williams, in a recent interview with Reuters, commented: “This policy could backfire, driving up the price of final products, reducing the competitiveness of American goods, and potentially hindering critical infrastructure projects.”

Conclusion

The U.S. decision to impose a 50% tariff on semi-finished copper products is a strategic move to restructure the supply chain and boost domestic production. However, the direct impact is focused on Canada and Mexico, two of the U.S.’s close trading partners. Although the USMCA agreement can provide some protective mechanisms, the uncertainty surrounding its enforcement remains a significant risk. In a global context, this policy could cause supply chain disruptions, affect trade flows and prices, and may not achieve the initial goal of reducing costs for domestic manufacturing sectors. The future developments of the global copper market will depend on how the affected countries adjust their policies and strategies, as well as the progress of future trade negotiations.

Source: metal.com and compiled from the internet.