(The views expressed here are those of the author, a columnist

for Reuters.)

By Clyde Russell

LAUNCESTON, Australia, July 10 (Reuters) - The planned

50% tariff on copper imports may turn out to be the biggest own

goal of U.S. President Donald Trump's ongoing trade war with the

rest of the world.

Trump announced the tariff on Wednesday, saying it would

become effective on August 1.

While Trump seemed quite definitive in his statement, there

is a lack of detail of what products will be included in the

definition of copper, and whether there is scope for exemptions

or lower rates for some major suppliers to the United States,

such as Chile and Canada.

But even if some concessions are made before the

implementation date, the end result is likely to be that copper

imports are slugged with a considerably higher tariff than what

prevailed prior to Trump's return to power in January.

As with Trump's other tariffs the motivation behind the

tariffs on copper is to encourage more domestic mining and

smelting of the industrial metal, which is key to making

electric vehicles, military hardware, semiconductors and a wide

range of consumer goods.

The problem for Trump's somewhat naive economic vision is

that the reality of the U.S. copper market is that it will be

extremely difficult to get a meaningful boost to copper mining

and processing in both the short and long terms.

The United States produces just over half of its annual

copper requirements, and its imports of refined metal were

810,000 metric tons in 2024.

It's possible that copper miners such as Freeport McMoRan ( FCX )

and Rio Tinto could run their existing mines

harder and lift output, but that would only provide a short-term

lift in ore supply and would unlikely be sustainable.

Importing copper ore and refining it is also unlikely, as it

would take time and money to re-commission idle smelter

capacity, with the only viable candidate being the Grupo

Mexico-owned Asarco plant in Hayden, Arizona, which has been

mothballed for more than four years.

There are new mines in the planning stage, with the most

significant being Rio's Resolution Copper in Arizona, which has

been delayed by legal challenges by the indigenous Apache

people.

A Supreme Court ruling in May in favour of Rio and its

partner in Resolution BHP Group, would appear to clear

the way for the mine's development, but even if this is

fast-tracked it will still take several years before first

production.

IMPORTS NEEDED

In the meantime, the United States is going to be reliant on

copper imports, meaning that buyers of the metal have limited

choices.

They can either pay the tariff or lower copper consumption

by producing less of whatever they are making.

This means that car makers, home builders and electronics

manufacturers will likely face higher costs, as domestic copper

prices will rise to match the level of imported metal.

How those costs get absorbed or passed on will depend on the

market power of the companies involved, but the overall impact

is likely to be higher inflation if costs are passed to

consumers, or lower investment and employment if companies do

what Trump has suggested and "eat the tariffs."

The impact of the tariffs will also affect copper pricing

and movements around the globe, both in the short and long

terms.

The United States has sucked in vast quantities of copper so

far in 2025, with analysts at Macquarie estimating imports

totalled 881,000 tons in the first half of this year compared to

an underlying requirement of roughly 441,000 tons.

This means that once the tariff is implemented U.S. imports

are likely to plunge as the stockpiled, and cheaper, metal is

used up.

This is likely to drag global copper prices lower, reversing

a trend of rising prices since Trump's return to the White

House.

Benchmark London copper contracts ended at $9,630.50

a ton on Wednesday, up almost 10% since the end of last year.

U.S. copper contracts rose to a 26% premium over

their London equivalent on Wednesday from a 13% premium before

Trump's announcement.

That 26% premium is still well short of the 50% tariff,

likely indicating the uncertainty in the market as to what types

of copper products will be subject to tariffs or the risk of a

lower rate for some countries.

But once clarity is reached on the final form of the copper

tariff, and once the existing stockpile is used up, it's likely

that U.S. prices will rise to a premium that reflects the tariff

level.

The views expressed here are those of the author, a

columnist for Reuters.

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(Editing by Christian Schmollinger)