Copper price drops as raw metal excluded form 50% US tariff
AFP:
US President Donald Trump on Wednesday imposed a pared-back import tariff on copper that excluded the metal in its raw form from a 50-percent levy on semi-finished products.
The price of copper, which had soared after Trump flagged the tariffs earlier this month, plunged by almost 20 percent when it emerged the duty would not apply to refined or raw copper metal.
The metal is used extensively in industry and defense manufacturing, and the White House said the United States had become overly reliant on copper imports, having once been a world leader in production.
It is also critical for the artificial intelligence and green energy revolutions.
The tariffs will take effect Friday, the White House said.
Chile, the world’s top copper producer and the United States’ main supplier, heaved a sigh of relief at the exclusion for raw metal.
“An initial reading allows us to conclude that tariffs will not be applied to copper cathodes” — high-purity sheets of the raw metal — “allowing us to continue as a country supplying that market,” Maximo Pacheco, president of Chilean state mining firm Codelco, told reporters.
Chile is responsible for nearly a quarter of the global copper supply, accounting for 10 to 15 percent of its GDP.
The United States imports about 45 percent of the copper it needs for industrial use, according to the US Geological Survey, a government agency. Of that, it gets 51 percent from Chile.
The White House announcement said tariffs on cars and those on copper products will not be cumulative. If a product is subject to both, it is the auto tariffs that will apply.
The lack of tariff “stacking” will reassure investors who rushed to buy copper early this month when Trump said he was considering a universal 50 percent tariff on the metal.
Copper prices hit a record then at more than $5.80 per pound.
The White House justified the tariffs on national security grounds.
“The United States is now dangerously dependent on foreign imports of semi-finished copper, intensive copper derivative products, and copper-containing products, and imbalances in the global markets make domestic investment increasingly unviable,” it said.
The White House cited a Cold War-era law, the Defense Production Act, to guarantee that part of US production of copper cannot be exported, so as to support US industry.