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Trump announces 50% tariff on copper - concern mounts in Chile

The 50% tariff on copper is consistent with previous tariffs imposed on steel and aluminum

US President Donald Trump on Tuesday announced a 50% tariff on copper imports and stated he was considering a 200% tariff on pharmaceutical products if manufacturers do not move their operations to the United States. These announcements were made during a cabinet meeting, though no official executive order has yet been published on the White House website.

The 50% tariff on copper is consistent with previous tariffs imposed on steel and aluminum. This measure immediately impacted the market, with copper prices on the US Comex market rising by nearly 17%. Shares of US mining company Freeport-McMoRan surged by 6.1%, and Mexico's Southern Copper climbed by 2.9%.

The announcement was particularly significant for Chile, the world's largest copper producer, as the US is a major market for its exports. Codelco, Chile's state-owned mining company, provides most of the copper Chile exports to the US.

“The US will continue to need copper, and Chile will continue to be available,” Codelco President Máximo Pacheco told local media after Trump's announcement and wondered whether the measure would be applied evenly to all suppliers, “or will there be a system of exceptions?”

The United States imports some 700,000 tons of copper, of which 500,000 tons are supplied by Chile and 350,000 tons stem from Codelco. “So, for practical purposes, the United States will continue to need copper, and Chile will continue to be available as the main supplier of copper to the United States,” he insisted.

Meanwhile, former Chilean Finance Minister Ignacio Briones said that “this is very bad news for Chile: the cost of disastrous protectionism.”

“Will President Trump's Chilean supporters still back him?” he also asked himself.

Regarding the pharmaceutical tariff threat, Trump mentioned a “very high tariff” of approximately 200% on those products if their manufacturers do not establish operations in the US after a grace period of “about a year, a year and a half.” He also criticized past administrations for allowing the relocation of this industry abroad. “They all left. They went to other places because the people in this room allowed it to happen. And I don't allow it. The people in this room don't allow it to happen,” he underlined.

These new tariffs align with Trump's ongoing trade war and come a day before the initial deadline for trading partners to set new reciprocal tariffs. The U.S. has only reached trade agreements with China, the United Kingdom, and Vietnam, and Trump had previously extended a 90-day tariff truce until August 1.

The announcements signal a continued aggressive stance on trade by the Trump administration, aiming to bring manufacturing back to the US and address perceived trade imbalances.

During this time, the US has only reached agreements with China, the United Kingdom, and Vietnam, and Trump postponed the 90-day truce announced in April, which was set to expire on July 9, until August 1.