Copper Tariff Investigation Triggers Price Surge

The U.S. government’s investigation into copper imports has caused copper prices to spike. President Trump’s administration has raised concerns about national security due to America’s growing reliance on imported copper.

U.S. Faces Rising Copper Dependency

The U.S. Department of Commerce recently launched an investigation into the potential impact of copper imports on national security. According to a February 25 fact sheet from the White House, America’s smelting capacity lags behind major players like China. While China controls over 50% of global copper smelting, the U.S. ranks outside the top five countries for smelting capacity.

Despite having vast copper reserves, the U.S. now relies on copper imports for nearly 45% of its copper needs, a significant rise from the near-zero percent in 1991. This growing dependence raises concerns over the security of copper supplies, especially for critical industries like defense, energy, and electronics.

The White House document emphasizes that copper plays a vital role in defense applications, clean energy, electric vehicles, and advanced electronics. Copper ranks as the second-most-used material by the U.S. Department of Defense.

Rising Copper Prices and Economic Concerns

Following the announcement of the copper tariff investigation, copper prices saw a sharp increase. On February 26, Comex copper traded at $4.73 per pound, a 4.2% jump from the previous day’s close. The news has sparked concerns over potential tariffs on copper imports and their economic repercussions.

Although no timeline has been set for the investigation, White House trade adviser Peter Navarro stated that the inquiry would be completed swiftly. However, experts warn that imposing tariffs could lead to higher costs and inflation. These concerns echo criticisms of previous tariffs on steel and aluminum imports, which also led to increased consumer prices.

Broader Economic Impact and Consumer Confidence

The potential for tariffs has also affected consumer confidence. A recent survey by the Conference Board revealed the largest drop in consumer confidence in over three years. Households are increasingly worried about the impact of inflation on their budgets.

The rise in copper prices comes at a time when industries and consumers are already facing higher costs from other tariffs. As the investigation into copper imports continues, its outcomes could have far-reaching consequences for the U.S. economy.