US President Donald Trump’s plans to impose 50 percent tariffs on copper imports are set to include the kinds of materials used for power grids, the military and data centers.
Plans involve including semi-finished products, said people familiar with the matter who asked not to be named as discussions are private.
That comes as few details of Trump’s plans for copper tariffs have been revealed so far.
Photo: AFP
The tariff measures have not yet been formalized and they could change.
It has been widely expected that refined copper would be tariffed, but it was unclear what would happen with semi-finished products — a category that includes wires, sheets, tubes and plates. Including semi-fabricated goods would ramp up the impact of the levies.
The levies, which Trump said would come into effect on Aug. 1, would have far-reaching impacts on the US. The move is expected to raise costs across a swath of the US economy due to the myriad of industries and applications reliant on the metal. Copper is used in everything from consumer electronics and automobiles to construction and the military.
Trump is pursuing the tariffs as part of his effort to bolster the US’ copper supply chain, which encompasses mining, refining and processing, recycling and making semi-finished goods and end products.
The biggest category imported by the US is refined copper, which has a metal content of more than 99.993 percent. The US imported 908,000 tonnes last year, which were consumed by fabricators to make rods, cables and alloys.
North America’s biggest fabricator is Southwire Co, which supplies wires for US military installations and naval vessels. Southwire did not immediately respond to a request for comment.
The Copper Development Association describes copper semi-products as the key link in the US military-industrial supply chain in its March 31 submission to the US Department of Commerce for this year’s copper investigation under Section 232 of the Trade Expansion Act.
The industry group presented its comments on behalf of 90 percent of US copper semi-producers.
Domestic copper production is not enough for the US — forcing the country to source a significant amount of semi-finished copper from abroad.
An estimated 800,000 tonnes of copper and copper alloy semi-fabricated products were imported last year, on top of refined copper, according to MM Markets, a consultancy working with US fabricators and recyclers.
MM Markets cofounder Krisztina Kalman expects the 50 percent tariff to extend to semi-products for security reasons.
Any disturbance in foreign supply of copper and semi-finished products could expose the US to significant issues in delivering electricity, she said.
Imposing tariffs on semi-finished copper could also bring disruption to fabricators, since wire rod mills rely on primary imports and levies would drive up their costs.
“The local fabricators will not be able to produce 800,000 tonnes more semi-products with current capacity, and it could take up to seven years to install new capacity,” Kalman said.
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