U.S. President Donald Trump said he plans to impose the 50 per cent on copper imports on August 1 in hopes of boosting U.S. production of the crucial metal.
Trump announced the tariff Wednesday on his Truth Social platform and noted that copper is needed for semiconductors, aircraft and batteries and is the second most used material by the Department of Defense.
“America will, once again, build a DOMINANT Copper Industry,” he said.
Trump floated a copper tariff in a February presidential action warning that China dominates global copper refining, which he called a threat to national security.
The tariff is to take effect Aug. 1 on top of existing 50% tariffs on steel and aluminum.
Canadian exports of copper to the U.S. totalled $5.7 billion in the 12 months through May, meaning a lighter potential impact than tariffs on steel and aluminum where Canada exported $34 billion worth of metal to the U.S., said BMO senior economist Robert Kavcic in a note.
Quebec would be most affected as it’s where most exports originate as Canada’s only copper smelter, owned by Glencore plc, is there, but there could be wider repercussions, he said.
“Bigger picture, even if a copper tariff would be relatively contained, it would be another shot that impacts business confidence more broadly.”
The threat of tariffs has already driven up copper prices in the U.S., and because it’s such a core metal to the economy, the higher prices themselves could hit wider economic growth, said Dobner.
“What we will see is indirectly, potentially, that could drive the U.S. to a less vibrant economy, pushing its economic growth even lower.”
With files from The Canadian Press
