Copper News: U.S. Premium Signals Tariff Threat Won’t Hit 50%

Why Trump’s 50% Copper Tariff Threat Is Likely Just a Negotiating Tactic

President Trump’s dramatic announcement of a 50% tariff on copper imports may sound definitive, but market reactions and policy precedents suggest the final rate will be significantly lower—if implemented at all. Here’s why this threat is more likely a negotiating position than an actual policy outcome.

Market Skepticism Speaks Volumes

The copper market’s response reveals telling skepticism about the 50% figure. While prices initially spiked 13% after Trump’s announcement, they quickly retreated by 3.5% the following day.

More revealing is the pricing premium between U.S. and international copper markets. Despite the announced tariff, the U.S. premium over London prices rose to only 26%—well short of the threatened 50% level.

As analyst Jordan Rizzuto noted, this suggests “the market does not currently expect the final level to be anywhere near 50%.”

Trump’s Track Record of Negotiating Through Tariff Threats

Trump’s tariff strategy consistently follows a pattern: announce extreme rates, then negotiate down to more manageable levels. Throughout 2025, he’s repeatedly delayed tariff implementations and granted exemptions.

His “reciprocal tariffs” have been pushed back multiple times, with many countries securing lower rates through bilateral negotiations.

The EU received a deadline extension after direct talks with European Commission President Ursula von der Leyen, demonstrating Trump’s willingness to modify positions when presented with compelling alternatives.

Economic Reality Constraints

The fundamental economics of U.S. copper supply make a 50% tariff practically unworkable. America imports nearly half its copper needs—810,000 metric tons annually—primarily from key allies like Chile, Canada, and Peru.

These aren’t adversarial relationships that warrant punitive tariffs. Moreover, Commerce Secretary Howard Lutnick’s comments about bringing “copper production home” acknowledge the long-term nature of mining development, suggesting awareness that immediate supply substitution is impossible.

Strategic Ambiguity as Policy Tool

Notice how Trump’s announcement lacked crucial specifics. He didn’t clarify which copper products would be covered, whether exemptions would apply to USMCA partners like Canada and Mexico, or if existing stockpiles would be grandfathered.

This ambiguity is intentional—it maximizes negotiating leverage while preserving flexibility to adjust the actual policy. The pattern mirrors his approach with automotive tariffs, where the White House is “still considering whether to grant exemptions” despite the announcement.

The Real Goal: Domestic Investment Incentives

Rather than punishing imports, Trump’s copper tariff threat appears designed to incentivize domestic mining investment and accelerate projects like Rio Tinto’s Resolution Copper mine in Arizona.

By creating uncertainty about future import costs, the administration can drive private capital toward domestic production without actually implementing economically destructive tariffs.

The 50% copper tariff is classic Trump: a bold opening bid designed to focus attention and create negotiating pressure. Like many of his trade threats, expect the final outcome to be far more modest—if it materializes at all.

More Information in our Economic Calendar.