Although it will take years to see results, President Donald Trump has expressed his concern about the United States’ reliance on other nations for a large portion of its copper supply and is seeking to increase domestic copper mining.
The president instructed the secretary of commerce to begin an investigation into the national security threat posed by copper imports and to suggest measures to lessen that threat, which the order stated could include “potential tariffs, export controls, or incentives to increase domestic production.” The order was issued on February 25. The largest producer in the world, Chile, as well as Canada and Mexico, supply the majority of the copper imported into the United States.
According to Christopher Ecclestone, principal and mining specialist at investment bank Hallgarten & Company, the United States only mines 60% of its copper needs. “The remainder is imported. He told MarketWatch, “There aren’t any ‘turn-on-able’ mines that are just waiting for better prices.”
No “turn-on-able” mines exist; they are only awaiting higher pricing. Hallgarten & Company, Christopher Ecclestone
Ecclestone called Trump’s goal to strengthen and increase the independence of the U.S. copper sector a “pipe dream” at this time. It’s possible that the president will be “long gone before a mine currently on the drawing board gets built.”
However, Chris Krueger, managing director at TD Securities, wrote in a recent report that the administration’s declared objective is to return production to the United States.
In order to safeguard national security, the president of the United States may modify the importation of products or materials from foreign nations under Section 232 of the Trade Expansion Act of 1962.
According to Krueger, if Section 232-based inquiries grow, Trump’s first presidential emphasis might be revived. A list of 35 mineral commodities deemed essential to the U.S. economy and national security was released by the Interior Department in May 2018.
Reliability and security of vital metal supply can also “focus on the crucial inputs for a number of the critical industries of the future,” according to Krueger.
The growing importance of copper
Because of the “critical nature of copper’s use in armaments,” the United States views copper imports as a national security concern, according to John Caruso, senior market strategist at RJO Futures. According to Caruso, the threat is what the United States refers to as “dumping” by China, which is basically “oversupplying the market and thereby influencing price and harming U.S. domestic production.”
According to Dow Jones Market Data, copper prices have already increased 13% this year on Comex, and Trump’s executive order arrives at a time when they are strong. Friday’s closing price for the most active May futures contract for copper (HGK25) (HG00) was $4.55 per pound.
Trump’s executive order is expected to have inflationary effects “and in a manner that could persist for some time, given that it is a slow process for a copper mine to bring on new marginal supply,” according to Jordan Rizzuto, chief investment officer and managing partner at GammaRoad Capital Partners.
On May 21 of last year, copper prices reached a record-high settlement of $5.106 a pound. In 2024, they had a 3.5% rise.
“Expectations for both cyclical and secular demand drivers, such as India’s consumption to support economic development and the global build in data centers,” Rizzuto told MarketWatch, have positively impacted prices.
Meanwhile, he stated, “the copper mining sector has seen a decline in investment, which has limited marginal supply.” It may take five to ten years for additional copper supplies to reach the market, even with higher capital expenditures.
Considering the longer-term supply restrictions of insufficient capital expenditures and the time required to turn on new mining operations, Rizzuto predicted that the anticipated increase in demand for copper from data centers and artificial intelligence will “likely only exacerbate the production deficit.”
While imposing tariffs on copper imports would be a long-term constructive move for prices, as it would restrict supply into the U.S., it is unlikely to be a “imminent issue,” according to Caruso of RJO Futures.
He stated that although he is still optimistic about copper, the market may see some short-term price drops.
Caruso said that if the tariffs planned by the Trump administration are enacted, copper may reach new all-time price highs. “Copper may be a second half of 2025 story,” he said.
