1 MIN AGO: Trump RAGES After Canada Halts Copper Exports to U.S. - $4.2 Billion Lost to Canada!

Summary

President Trump's 50% tariff on copper imports, aimed at boosting US industry, has triggered an economic backlash. Copper prices surged, disrupting industries like electronics, construction, and EV manufacturing. Canada's swift retaliation, freezing copper exports and pivoting to Asian markets, exposed a vulnerability in the US supply chain. The tariff has raised production costs, forcing businesses to absorb losses, with consumers facing higher prices. This trade war is reshaping global copper dynamics, causing economic instability and potentially pushing the US towards isolation in critical metal markets.

Takeaways

• 😀 Trump announces a 50% tariff on imported copper, scheduled to take effect on August 1st, 2025, under the Trade Expansion Act's Section 232, citing national security concerns.
• 😀 Copper prices surged 13% overnight in the US, hitting a record high, while prices on the London Metal Exchange (LME) dipped due to fears of declining US demand, creating a price gap.
• 😀 Canada responded by halting copper exports to the US and redirected shipments to Asian markets like Japan, South Korea, and China, leveraging its $9.3 billion annual copper exports as economic leverage.
• 😀 The 50% tariff caused immediate economic disruption, leading to $4.2 billion in losses and setting off a supply crisis across industries reliant on copper, such as electronics, automotive, and construction.
• 😀 The US is highly dependent on imports for its copper needs, producing only 50% of its refined copper and relying heavily on countries like Canada, Chile, Peru, and Mexico.
• 😀 Canada's strategic shift in copper exports aims to reduce reliance on the US and reposition itself as a stronger player in the global metals supply chain.
• 😀 The tariff's impact on US industries has been severe, with the automotive and EV sectors, especially companies like Tesla and Ford, facing higher production costs and project delays due to copper shortages.
• 😀 Small manufacturers in states like Ohio and Indiana have seen a rise in copper wire prices, losing contracts to competitors in Vietnam and Thailand, where prices remain stable.
• 😀 US utility companies have had to raise electricity rates due to the 22-25% increase in copper-based material costs, directly affecting consumers through higher utility bills.
• 😀 The 50% copper tariff has triggered a wider economic slowdown, with experts predicting a 0.5% GDP shrinkage, as industries stall and businesses incur billions in direct losses.

Q & A

What prompted the United States to impose a 50% tariff on copper imports?

The 50% tariff was imposed by President Donald Trump as part of his administration's broader strategy of protectionism, aimed at protecting U.S. industries by limiting foreign imports of key materials, such as copper, which are vital for manufacturing and national security.

How did the global copper market react to the U.S. tariff on imports?

Following the announcement, copper prices on the U.S. market surged 13%, reaching record highs, while prices on the London Metal Exchange (LME) dropped slightly, creating a significant price gap between U.S. and global copper prices.

What was Canada’s response to the U.S. tariff on copper imports?

Canada immediately responded by freezing its export contracts and halting shipments of copper to the U.S. Major mining companies like Tech Resources and Hudbay Minerals pivoted toward markets in Asia and Europe, reducing their reliance on the U.S. as a customer.

What strategic move did Canada make to reduce its dependency on the U.S. copper market?

Canada launched a $1.8 billion investment plan to expand its copper export capacity and infrastructure, aiming to diversify its trade routes and reduce vulnerability to U.S. tariff policies by focusing more on Asian and European markets.

What are the long-term risks for the U.S. economy due to the copper tariff?

The U.S. risks economic isolation, similar to the protectionist policies of the 1930s, as industries reliant on copper—such as automotive, energy, and telecommunications—face higher costs, potentially leading to inflation, production stagnation, and job losses.

How has the tariff impacted U.S. industries such as electric vehicles (EVs)?

The copper tariff has caused a price spike in copper, raising the cost of producing electric vehicles by approximately $90 per car. Companies like Tesla and Ford are losing millions each month, and some EV projects have already been postponed due to shortages of critical copper.

What effects have the copper tariff had on small manufacturers in the U.S.?

Small manufacturers in Ohio and Indiana, particularly those producing electrical wiring and electronics, are facing significant price increases—18% higher for imported copper wire—forcing them to lose contracts to international suppliers with more stable pricing.

How are U.S. utility companies dealing with the rise in copper prices?

U.S. utility companies are struggling with a rise in material costs for copper-based products such as conductors and transformer cores, leading them to file emergency requests for electricity rate hikes to cope with the increased expenses.

What broader economic impact has the tariff had on the U.S. GDP?

The tariff has caused major disruptions across multiple industrial sectors, and a report from UBS projects that U.S. GDP could shrink by 0.5 percentage points in the current quarter, resulting in direct losses of $4.2 billion due to the reduction in copper imports from Canada.

What are the implications of the U.S. losing its position as a central player in the copper supply chain?

The U.S. has lost control over a vital global supply chain, with copper prices soaring, especially for industries like electric vehicles and construction. This shift not only disrupts U.S. manufacturing but also places greater financial burdens on consumers, who face higher costs for everyday goods and services.