Trump signs executive order imposing tariffs on copper imports
On February 25, US President Trump signed an executive order to impose tariffs on copper imported from overseas. He said that there are security concerns about dependence on South America and China, and he strives to expand the domestic copper production capacity of the United States. Since it takes a long time to develop mines and is also affected by international market conditions, it is still unknown whether it can proceed as expected.
According to Section 232 of the US Trade Expansion Act, Trump instructed the US Department of Commerce to investigate the actual situation on the premise of imposing tariffs. Section 232 stipulates that if it is believed that imported goods have an adverse impact on US security, tariffs and import quantity restrictions can be initiated.
According to regulations, the investigation will be completed within 270 days, but US government executives told reporters that “it will proceed according to the ‘Trump time'”, indicating the idea of completing the investigation ahead of schedule.
The launch time and tax rate of additional tariffs and other measures have not been disclosed. Some analysts believe that it is expected to be based on 25% as the additional tariffs imposed on steel and aluminum products.
In the presidential order, Trump instructed that the investigation targets not only copper ore, but also derivative products such as copper wire and copper scrap. Copper is easy to process and has a wide range of derivative products. If tariffs are imposed on all products, the scope of its impact may expand.
In order to justify the tariff increase, the White House explained that copper is “the second most used material in the Department of Defense.” The White House also repeatedly emphasized that copper is also used in infrastructure and pure electric vehicles (EV) and is a product involving security.
Copper production is concentrated in Central and South America, and smelting is concentrated in China.
Data from the United States Geological Survey (USGS) show that copper reserves are mainly concentrated in Chile and Peru, and about 40% of the world’s copper production comes from Central and South America.
The United States’ dependence on imported copper has reached 45% of domestic consumption by 2024. The above-mentioned senior official said that the domestic production and smelting base in the United States will be expanded, and the goal of “increasing production by 70% by 2035 and reducing dependence to 30%” has been proposed.
A senior White House official told reporters that “the United States has the fifth largest copper reserves in the world, but it lags far behind in smelting technology and other aspects.”
China has an advantage in the smelting and processing of copper, and ranks first in the world in terms of imports of copper produced in mines. Senior White House officials said that there are also plans for Chinese capital to build smelters in Africa, showing vigilance against China.
Under Section 232 of the Trade Expansion Act, the first Trump administration launched additional tariffs on steel and aluminum products, but many exemptions were recognized.
The Trump administration currently plans to cancel the exemptions and fully apply additional tariffs on steel and aluminum from March 12. In addition, the scope of application of additional tariffs will be expanded to downstream products such as screws and aviation parts.
Source: Nikkei