President Donald Trump’s proposal to impose tariffs on U.S. copper and aluminium imports is expected to drive up costs for local consumers due to insufficient domestic production, analysts and industry experts warned on Tuesday.
In a speech on Monday, Trump announced plans to levy tariffs on aluminium and copper—both critical for U.S. military hardware—along with steel, in an effort to encourage domestic production of these essential metals.
“We have to bring production back to our country,” he commented.
The prospect of tariffs on U.S. imports prompted a surge in copper buying on COMEX, driving prices up by 0.9% to $4.2705 per pound, or $9,415 per metric ton. This increase widened the premium over copper prices on the London Metal Exchange (LME) to $389 per ton.
According to BNP Paribas, the United States imports 38% of its copper needs and is highly dependent on aluminium imports, with supplies from other countries such as Canada and Mexico covering 82% of its annual consumption.
“In the U.S., manufacturers will have little choice but to pass on higher costs from imports to consumers until the downstream industry (refining/smelting) has undergone suitable investment,” said Natalie Scott-Gray, senior metals analyst at StoneX.
Reuters reported,” U.S. aluminium and copper smelters have been closing and would need new infrastructure and power contracts to restart, among other measures,” said analyst Daniel Morgan at Sydney investment bank Barrenjoey