[News] Trump’s Proposed 50% Copper Tariff: What It Means for Chips, U.S. Imports, and Beyond

Trump’s plan to slap a 50% tariff on copper imports sent Comex futures soaring as much as 17% on Tuesday, as per Reuters. But the impact goes beyond price spikes—copper is crucial to electric vehicles, semiconductors, defense systems, and consumer electronics, Reuters notes.

According to Reuters, the announcement follows a probe Trump initiated in February to assess whether copper imports were undermining domestic production. The Section 232 investigations, originally set to conclude in November, reportedly aimed to evaluate a broad range of copper products—from raw mined copper and concentrates to alloys, scrap, and derivatives.

With U.S. Commerce Secretary Howard Lutnick expecting the tariffs to take effect by late July or early August, here’s a quick rundown of copper’s role in semiconductors, America’s reliance on the metal, and the potential ripple effects on the global supply chain.

Copper and Chips

According to Value the Markets, as the semiconductor industry pushes toward smaller, faster, and more powerful chips, the focus extends beyond design and lithography. Copper interconnects—the tiny wires linking billions of transistors—are crucial.

As chip architectures shrink to 3nm and beyond, copper is starting to hit its limits. The report highlights growing challenges like increased resistance, heat buildup, and structural fragility. However, while alternatives like cobalt and ruthenium are being explored, copper still dominates the industry, the report adds.

Therefore, the report warns that any shortage or drop in copper quality could push up production costs and slow down timelines for top chipmakers, as they rely on cutting-edge chip design and manufacturing to stay competitive.

U.S. Depends on Imports While Arizona Drives Domestic Copper Production

Citing data from the U.S. Geological Survey, Bloomberg says that the country consumed around 1.6 million tons of refined copper in 2024. Notably, Reuters suggests that the U.S. produces just over half of the refined copper it consumes each year, with over two-thirds of domestic output mined in Arizona.

It is interesting to note that while the White House frames the new 50% tariff as a move to counter China’s market dominance, the reality is that more than 90% of U.S. refined copper imports come from allies in the Americas, Reuters points out. Chile leads as the top supplier with 38% of U.S. imports, followed by Canada at 28% and Mexico at 8%, Bloomberg adds.

Thus, if the 50% copper tariff takes effect, Chile—particularly its state-owned giant Codelco—will face the toughest blow, according to Bloomberg.

China’s Role

According to Reuters, while China dominates global copper refining, much of the raw ore it processes is mined abroad—especially in Latin America. Chile and Peru together accounted for about one-third of the world’s copper output last year, according to the U.S. Geological Survey data cited by the report.

Notably, the report suggests that through massive investments in the Democratic Republic of the Congo (DRC), China is rapidly expanding its influence over global copper mining. The DRC has now surpassed Peru to become the world’s second-largest copper producer—largely thanks to Chinese-backed projects, Reuters says.

On the other hand, Reuters suggests China’s copper smelting industry far outpaces the rest of the world, with dozens of smelters in operation as of 2024. In stark contrast, the U.S. has just two primary copper smelters, the report adds.

Read more

• [News] U.S. Reportedly Mulls Tariff Pause Extension as China Talks Bypass Military Rare Earths
• [News] China’s Rare Earth Exports Surge 23% in May, Reaching 1-Year High Despite Controls
• [News] H20 AI Chip Ban Reportedly Holds as China-U.S. Talks Heat Up — What’s Next for Both Sides?

(Photo credit: Resolution Copper)