Trump’s big tariffs on copper make it harder for US to compete

Tariffs have worked well for Donald Trump in one way, by making headlines that highlight something he considers a problem. As a practical solution to that problem, however, tariffs are rarely effective and often make things worse. Take last week’s announcement of a 50% tariff on imports of copper.

Copper is an essential metal in the electrification of everything. Demand for it globally is forecast to grow two-thirds by 2035. Three times as much copper is needed for an electric car than an internal combustion engine vehicle. Likewise when generating a megawatt of energy from offshore wind rather than fossil fuels. America currently imports around half its copper, yet has large deposits that currently are not being mined. Hence President Trump’s logic: use tariffs on imports to raise the price of copper, thus incentivising more domestic copper production.

Alas, it is unlikely to work that way in practice. True, a massive Resolution Copper mine in Arizona, decades in the planning, will now go ahead after the Supreme Court last month struck down efforts to block it on religious grounds. Yet it is hard to see how America’s domestic supply of copper could be dramatically increased anytime soon, even with the Trump administration reducing federal regulatory barriers.

Typically, it takes over 15 years to open a new mine, including planning, getting local approvals, installing the equipment, hiring workers and creating supply chains. As Kathleen Quirk, the chief executive of Freeport-McMoRan, a big American copper producer, explained in April: “The private sector is unlikely to invest in a multiyear project on the basis of a tariff that could be removed or changed tomorrow.” Instead, by making this crucial metal more expensive, the tariff instead will likely hurt American competitiveness.