U.S. Imposes 50% Tariff on Copper Products: Will China Be Significantly Impacted?

Recently, U.S. President Donald Trump signed a proclamation, imposing a uniform 50% tariff on imported semi-finished copper products and copper-intensive derivatives starting from August 1st. Experts analyze that this “escalation of protectionism” will directly impact U.S. neighbors such as Mexico and Canada, and may also trigger a backlash against copper-intensive industries in the U.S., including electric vehicles and data centers.

Industry insiders note that although China is the world’s largest producer of copper products, due to trade structure factors, China will be less affected by the copper tariffs. However, this U.S. move may disrupt the global copper industry chain and price system, indirectly affecting the cost structure of Chinese copper processing enterprises.

Mexico and Canada Likely to Bear the Brunt

Copper is a critical component in electronics, machinery, automobiles, and various other products. Public reports indicate that half of the copper consumed annually in the U.S. is imported. According to Al Jazeera, if the new U.S. copper tariffs take effect, the most affected nations will be Chile, Canada, and Mexico—three major suppliers of refined copper, copper alloys, and copper products to the U.S. in 2024.

Notably, refined copper—a key raw material for manufacturing—remains exempt from the tariffs due to insufficient domestic refining capacity in the U.S. As reported by the Financial Times, while the U.S. produces some copper ore, its smelting capacity cannot meet domestic demand for refined copper. Additionally, smelters typically require years to construct, making rapid replacement of imported refined copper with domestic production infeasible. Foreign media analysis suggests that refined copper-producing countries like Chile and Peru will not face significant export disruptions due to this exemption; in fact, they may even “benefit.”

Wang Wei, a senior copper researcher at Galaxy Futures, explains that a universal copper tariff would most harm Chile and Canada. However, with tariffs targeting only semi-finished copper, Chile—responsible for 70% of U.S. refined copper imports—will see reduced impacts. In contrast, Canada exported 154,000 tonnes of refined copper to the U.S. last year (16.6% of U.S. imports) plus 150,000 tonnes of copper materials. “Thus, the U.S. tariff policy will noticeably affect Canada.”

An anonymous industry expert adds that Mexico will face greater impacts due to refined copper’s exemption. Data shows Mexico’s copper material exports to the U.S. account for 60% of its total, with copper wire (77.6% of U.S. imports) and copper tubes (21% of U.S. imports) as key categories. “The tariffs explicitly target semi-finished copper products, directly hitting processing clusters along Mexico’s northern border.” For example, 80% of production capacity at copper wire factories in Mexico’s Monterrey region relies on U.S. exports. Post-tariff, these firms face choices: absorb the 50% tariff, slashing margins from 8% to -3%, or invest $200 million in 18-month equipment upgrades to produce high-value automotive wire harnesses.

How Will “Copper Tariffs” Affect China?

China leads global production of copper products, ranking first in refined copper and copper processed goods output in 2024. What level of impact will U.S. tariffs have on China?

The U.S.-based Cato Institute dismisses claims that tariffs aim to counter China’s dominance in global copper smelting and refining. While China accounted for approximately 45% of global refined copper production in 2024, U.S. refined copper imports primarily come from Chile, Canada, Peru, the Democratic Republic of the Congo, and Mexico. China contributed less than 1% of U.S. refined copper imports in 2024, and similarly held a 1% share in U.S. imports of refined copper-based semi-finished products.

“The tariffs will have minimal impact on China,” notes Wang Wei. In 2024, the U.S. imported 50,000 tonnes of copper tube accessories—mainly from China, Germany, and Vietnam—with China supplying approximately 14,000 tonnes, its only significant copper export category to the U.S. Few other Chinese copper products enter the U.S. market.

However, the analyst warns the tariffs may disrupt global copper supply-demand dynamics, affecting global prices and indirectly impacting costs for Chinese enterprises.

Global Copper Trade Landscape May “Be Permanently Altered”

Trump previously stated on social media that “the U.S. will rebuild copper industry dominance.” CNN reports the White House deems the tariffs critical to national security, claiming Trump is “creating a fair playing field for U.S. copper firms to support a strong domestic industry.” The tariffs will have multi-faceted impacts on the U.S. itself.

The Financial Times notes that U.S. corporate executives expressed concerns when tariffs were first proposed, with analysts warning threats to key industries like electric vehicles, data centers, and defense. Singapore’s Lianhe Zaobao cites analysis that while raw copper exemptions ease some concerns, costs may still rise for copper-dependent sectors like construction, automotive, and electronics.

“Protectionist policies may stimulate domestic copper mining and smelting, but higher costs for copper-consuming industries will suppress investment and harm U.S. consumers,” says Song Guoyou, Deputy Director of Fudan University’s Center for American Studies.

A core goal is manufacturing reshoring, but Wang Wei argues the exemption of copper ore and refined copper signals a policy shift toward downstream processing. The U.S. aims to import raw materials like refined copper, process them domestically, and re-export—forming a “raw material import-domestic processing-product export” chain.

“This could encourage overseas copper processors to invest in the U.S., aiding domestic industry rebuilding,” Wang notes, “but it means relinquishing opportunities to develop critical upstream refined copper capacity.”

The Cato Institute doubts tariffs will solve capacity issues. Instead, it urges addressing domestic regulatory barriers: building and approving a U.S. copper smelter takes over five years, with regulatory burdens contributing to a decline in refineries from 9 (2000) to 5 today, per the Wall Street Journal.

A deeper impact is accelerating regionalization of global supply chains. Mexico plans to redirect approximately 20% of copper exports to Southeast Asia, while Chile seeks a “copper-lithium resource swap” mechanism with China. Such shifts may permanently reshape global copper trade flows.