Uncle Sam has a copper problem. In very round numbers, the US produces 1mn tonnes of the red metal, and consumes 2mn. The deficit is filled from overseas, creating a potential geopolitical vulnerability. Yet even within the US, there’s ample copper to go round, for those brave, rich and patient enough to extract it — especially if cheaper imports suddenly lose their allure. A case, then, for tariffs.
That, at least, is the logic from the White House. President Donald Trump has pledged to slap levies on imports of copper, having already identified the metal as a critical input for American prosperity. That drove the price of copper futures on US markets up by almost a fifth on Tuesday. Of course, a mooted blanket 50 per cent tariff is unlikely to be the final result. Now come the negotiations and capitulations.
There is a legitimate problem to be solved. Copper, while abundant, is increasingly expensive and hard to extract. For years, it has been apparent that a supply crunch looms, with natural growth in demand amplified by the transition to green energy and “electrification”. For example, an electric vehicle uses 2.5 times as much copper as a petrol guzzler, estimates S&P Global.