India Files WTO Complaint Against US 50% Copper Tariff

As of September 8, 2025, the price of copper on the London Metal Exchange (LME) for spot contracts has dropped to $9,810.50 per ton, down from the $9,974 per ton recorded on September 4. Similarly, LME copper inventories also decreased to 155,825 tons from 158,575 tons on September 2, indicating a tightening of supply. Recent news from the copper market shows that international prices have slightly declined after India officially filed a complaint against the US with the WTO. This move has heightened concerns over geopolitical risks and trade wars, which are negatively impacting global consumption demand.

To which group does the US policy apply?

The 50% tariff was issued under Section 232 (national security) and targets the copper content value in semi-finished products (e.g., pipes, plates, wires, and electrical components with high copper content) and derivative products. Refined cathode is not included in this immediate round of tariffs.

Why is India filing a complaint? What’s the next step in the WTO process?

India considers the 50% tariff to be a “disguised safeguard measure” and has requested consultations, which is the first step in a WTO dispute. If an agreement is not reached within 60 days of consultation, India can request the establishment of a panel.

However, the WTO’s Appellate Body is currently paralyzed. The losing party can “appeal into the void,” which means the ruling may not be immediately effective. Neither the US nor India are participants in the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), so the risk of the “case being stalled” is significant.

The situation of the two parties

India’s exports of copper and copper products to the US were approximately $330-$360 million in 2024/25, primarily consisting of pipes, plates, wires, and semi-finished products. While this is not a large share of the US’s total copper imports of about $17.4 billion (2024), it is very important for semi-finished product processors in India.

After the closure of the Sterlite plant in Tuticorin in 2018, India became a net importer of refined copper. The country relies heavily on refined imports and focuses on exporting semi-finished products. Domestic supply will only improve once Adani’s smelter increases its capacity.

This explains why India’s reaction is so strong: losing the US market could mean severe difficulties for numerous domestic processing companies.

Impact of the lawsuit and macroeconomic factors

Market analysts believe that India’s lawsuit acts as a negative catalyst for copper prices. The complaint increases instability in the global trading system, which has already been heavily impacted by US protectionist policies.

Geopolitical risks: By challenging US tariffs, India has highlighted the risk of a wider trade war. This instability makes investors more cautious, reducing capital flows into risky commodities markets like copper.

Impact on demand: As trade tensions escalate, global economic activity could slow down, affecting copper-dependent industries like construction, automotive manufacturing, and electronics. This would weaken consumption demand and put downward pressure on prices. Some investment banks have warned that copper demand could decline by 2-3% in Q4 2025 if the trade conflict is prolonged.

On the other hand, some other macroeconomic factors are also affecting copper prices:

Monetary policy: The Federal Reserve Governor’s statements supporting interest rate cuts could support copper prices in the long term by stimulating economic activity.

Production in China: China’s copper output is forecasted to decrease in September due to maintenance at smelters. This could support copper prices by restricting supply, even though demand from downstream manufacturers remains weak.

Output from Chile: Chile’s export data shows that supply from the world’s largest copper producer remains stable.

Significance of India’s WTO lawsuit

India’s lawsuit is not just a trade dispute but also has significant strategic implications:

Protecting domestic industry: At its core, India is seeking to protect its copper producers from adverse tariff policies, ensuring a fair competitive environment in the international market.

Strengthening the WTO’s role: India’s action highlights the importance of the WTO as a forum for dispute resolution. In a context of rising protectionism, countries using the WTO mechanism shows that faith in the multilateral trading system still exists.

Precedent for other nations: This is India’s third lawsuit against the US, following cases related to steel and aluminum. It sets a precedent for other countries to use the WTO to counter unilateral tariff measures that they consider illegal.

Source: Collected from the internet.