Chile breathed a little easier on Wednesday, July 30th, when Donald Trump announced that refined copper would be excluded from the 50% tariff that the United States will begin imposing on August 1st.
PUBLICIDAD
The 50% tariff, as reported by the White House, will indeed affect imports of semifinished copper products (such as pipes, wires, rods, sheets, and copper tubes) and copper derivative products with high copper content (such as pipe fittings, cables, connectors, and electrical components).
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The Trump administration’s measure caused the prices of American copper to fall by more than 17%.
Chile reacts with relief to Trump’s decision
Máximo Pacheco, the president of the National Copper Corporation of Chile (Codelco), the company that controls state production, highlighted the announcement and said in statements collected by Tele 13 that “a first reading allows us to conclude that no tariffs will be applied to cathodes, allowing us as a country to continue supplying that market.”
To the above, he added that this is “good news for Chile, for Codelco, and for our clients in the United States.”.
Until June of this year, Chilean exports of refined copper to the United States had already reached 4.1 billion dollars, reflecting a strong demand from American companies that may have sought to secure inventories in the face of possible protectionist measures.
Trump administration turns to a 1950 law
One of the surprising parts of the announcement made by the White House is related to the invocation of the Defense Production Act of 1950, so that from 2027, 25% of the copper input materials produced in the United States, such as concentrates, cathodes, and anodes, will be sold in the country. This percentage will then increase to 30% in 2028 and reach 40% in 2029. “This will increase the refining capacity of the United States by ensuring low-cost inputs while national refineries expand their operations,” said the Trump Administration.
According to an analysis by Reuters, applying tariffs only to pipes and other semi-finished copper products will not help boost the limited copper mining industry in the United States, and, on the contrary, it is a significant support for the mining industries of Chile and Peru.
The majority of refined copper imported by the United States comes from Chile, followed by Canada and then Peru.