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 FCN.X and Rio Tinto RIO.AX 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 BHP.AX, 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 CMCU3 ended at $9,630.50 a ton on Wednesday, up almost 10% since the end of last year.

U.S. copper contracts HGc3 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)

((christian.s@thomsonreuters.com; +65-6870-3395;))