President Donald Trump‘s threat to impose tariffs on U.S. copper and aluminium imports will result in higher costs for local consumers because of a shortfall in domestic production, analysts and industry participants said on Tuesday.
In a speech on Monday, Trump said he would impose tariffs on aluminium and copper – metals needed to produce U.S. military hardware – as well as steel, to entice producers to make them in the United States. The threat of levies on U.S. imports triggered buying on COMEX, where copper prices rose 0.9% to $4.2705 a lb, or $9,415 per metric ton, widening the premium over copper on the London Metal Exchange (LME) to $389 per ton.
“In the U.S., manufacturers will have little choice but to pass on higher costs from imports to consumers until the downstream industry (refining/smelting) has undergone suitable investment,” said Natalie Scott-Gray, senior metals analyst at StoneX.
U.S. aluminium and copper smelters have been closing and would need new infrastructure and power contracts to restart, among other measures, said analyst Daniel Morgan at Sydney investment bank Barrenjoey.
Tariffs and supply restrictions in times of crisis, mounting risks and uncertainties are a sure recipe for disaster – it will notably harm most of the downstream aluminium industries in the US and in the EU.
Read the full article: https://www.reuters.com/markets/commodities/trumps-copper-aluminium-tariffs-may-raise-costs-us-consumers-2025-01-28/
