The US announced a national security probe which could lead to a 25% tariff on refined copper imports as for steel and aluminium. With the US being a net importer of refined copper, the short-term implication will be more inflationary pressures.

On 25 February, US President Donald Trump ordered a national security probe under Section 232 of the Trade Expansion Act of 1962 to investigate the national security impact of copper imports.  That is the same law Trump used in his first term to impose 25% global tariffs on steel and aluminium. Copper is critical to electric vehicles, military hardware, the power grid and many consumer goods and has been officially added by the  US Department of Energy (DOE) to its Critical Materials List in August 2023. The aim of putting tariffs on imported refined copper is to rebuild the US smelting and refining capacity and to rely less on refined copper imports.

The US produced about 1.1Mt copper in 2024 (900,000t of concentrate) with the main producers being Freeport McMoRan, Rio Tinto, Southern Copper and Lundin Mining. The US exports concentrate and imports refined copper, as its smelting/refining capacity is lower than its concentrate production.

The top buyers of US copper concentrate are China, Japan, South Korea, and Canada, where they have large smelting and refining facilities. The US imported about 45% of its refined copper consumption in 2024, mainly from Chile for 64%, Canada for 20% and Mexico for 11%. Canada and Mexico have already been targeted by the US with a 25% tariff on all imports, and from 12 March a 25% tariff is due to be imposed on steel and aluminium global imports.

US smelting capacity has declined over the past fifteen years from an estimated 500-600ktpy in 2010 to 300-400ktpy currently due to ageing facilities, higher costs, a lack of investments and a shift to concentrate exports. The US main operating facility is the Kennecott smelter, operated by Rio Tinto with an estimated capacity of 280-300ktpy.

Should tariffs be imposed, it is far from assured that they would boost US copper smelting capacity. Furthermore, building smelters will take time, even if we assume no environmental permits delays and no funding issues. As for steel and aluminium, tariffs will primarily impact the US end users and ultimately the US consumer through higher inflation.