When Donald Trump recently announced a copper import tariff of 50% from August 1 it created panic in global markets, but what impact will it have here in Australia?
The tariff decision was largely expected given Trump had kicked off a review of copper imports in March, but the high rate and rapid time line were a shock to nearly everyone. Including me.
It immediately set off a stampede to get copper supplies into the country, with imports of refined copper surging to 541,600 metric tons between March and May, equivalent to 60% of imports over the whole of 2024. And in turn spiking world copper prices.
While President Trump’s move has perplexed many, it can be seen as part of his impetus to make the US self reliant. The US currently produces just over half the refined copper it consumes each year, or roughly 1.2M metric tons, with the rest mainly coming from Chile, Canada, and Peru.
Is self reliance realistic when they already have a 1M metric ton deficit? Well the US does have vast copper resources, but like any where it takes nearly thirty years to get a deposit to commercial operation, and new mines face all sorts of challenges even given the emergence of a far more favourable regulatory environment.
Australia shouldn’t see its export markets much affected give we send most of our copper to China, South Korea, Japan, India, Malaysia and the Philippines—in other words Asia. In a world fast dividing into US or China camps however, this may still come to complicate our diplomatic and commercial relationships.
The Trump Tariff signalled as much and underlies how strategic copper has become to a country’s growth, prosperity and, yes, security. Given its now critical to everything from weapons to energy, artificial intelligence and semiconductors, copper’s geopolitical importance has only just begun, one Australia will still have to negotiate with care.
Cheer, John Fennell