On July 30th, the copper tariff policy announced by the Trump administration of the US government, with a structural design of "precision strike" and "targeted protection" running concurrently, triggered a severe shock in the global copper industry, like a deep-sea bomb, shaking the entire metal market. Global copper prices plummeted to a high point, with the London Metal Exchange copper directly losing its recent accumulated gains and falling to a two-month low. US copper dropped by 22%, while the Shanghai Futures Exchange copper was relatively stable, testing the support at 78,000. According to the detailed rules released by the White House, this policy imposes a 50% high tariff on semi-finished copper products, but exempts copper concentrate and other raw material imports. At the same time, based on the "Defense Production Act", it requires that 25% of high-quality scrap copper domestically be reserved for domestic sales starting from 2025, and plans to impose similar proportion restrictions on copper raw materials starting from 2027. This "differential strategy of opening up raw materials and restricting finished products" aims to promote the expansion of US refining capacity by ensuring the supply of low-cost raw materials, but the actual effect has presented a contradictory situation of "protecting the upstream and squeezing the downstream". Policy design: "Dual-track system" for protecting refining capacity The US Department of Commerce clearly stated that the tariffs only target the copper content of imported goods, and non-copper components are levied at the original reciprocal tariff rate, and the copper products covered by the automotive import tariffs on March 26th can be exempted from the new tax. This design directly led to a sharp increase in the costs of downstream processing enterprises - automotive parts and electronic manufacturers that use copper as the main raw material need to pay higher tariffs for semi-finished products, while refineries can obtain raw materials at a lower cost. The White House fact sheet stated that the policy goal is to achieve "a 30% increase in US refined copper self-sufficiency rate by 2027" through "prioritizing the supply of raw materials to the domestic refining process".
Market reaction: Natural division of the industrial chain is distorted The president of Codelco, Maximom Pacheco, was the first to express support, saying that "the exemption of cathode copper is good news for Chile and the company"; the US Copper Development Association (CDA) also believed that the policy framework "is in line with its recommendations". However, the Canadian Mining Association sharply pointed out that this policy will severely harm enterprises that export high-value-added copper products to the US, "the profit margin of Canadian copper tubes and copper wire exporters has been compressed by more than 40%". StoneX analysis warned that although the continuous inflow of raw materials may lead to the return of US copper prices to international prices, the digestion of the previously accumulated inventory will take 12-18 months, and the distorted pattern of "profit in the refining process and loss in the processing process" in the short term is difficult to change. Future risks: Policy evaluation in 2026 may become a key node. It is worth noting that the Secretary of Commerce was required to extend the tariffs to more copper derivatives within 90 days, and the comprehensive evaluation of the policy will be initiated in 2026. The market is generally concerned that if the expansion of US refining capacity is not as expected, the policy may further be upgraded to "tariff on all types of copper products" after 2026, completely splitting the global copper industry chain. The European Copper Industry Association has warned that this "artificially created industry chain fragmentation" will increase the cost of global energy transition, "the copper cost of each electric vehicle may increase by 200 US dollars". China's industrial chain: Short-term benefits and long-term challenges coexist As the world's largest importer of copper concentrate and exporter of copper products, the impact of the policy shows "structural differentiation". On one hand, China's copper concentrate exports to the US may benefit from the increase in US raw material demand; on the other hand, the copper products and parts exported by China will face higher tariff barriers. Industry insiders pointed out that China needs to accelerate the layout of overseas refining capacity, "by building refining bases in Southeast Asia and Africa, avoiding US tariff barriers while ensuring resource security". As the policy evaluation node in 2026 approaches, the global copper industry is standing at a crossroads.
