WORLD´S LARGEST COPPER PRODUCER SAYS TRUMP´S TARIFFS ARE CAUSING "ANXIETY" / THE FINANCIAL TIMES

World’s largest copper producer says Trump’s tariffs are causing ‘anxiety’

Codelco’s chair says he does not understand what the US wants to achieve with levies on the metal

Leslie Hook in London

Analysts have warned tariffs on copper will threaten key US industries from electric vehicles to data centres and defence © Cristobal Olivares/Bloomberg

The world’s largest copper producer says US tariffs are causing anxiety as the $250bn industry awaits details of proposed levies on the metal less than two weeks before they are due to kick in.

President Donald Trump this month said he would impose a 50 per cent tariff on copper from August 1 but did not clarify if this would apply to the refined metal, semi-finished products or copper ore. 

Miners and industrial users have questions over the timing and nature of the tariffs.

Máximo Pacheco, chair of Codelco, a state-owned Chilean copper miner and a major supplier to the US, said the uncertainty was difficult to manage.

“Our customers have some anxiety and they need to understand where all this will end,” he told the Financial Times in an interview. 

Free trade “is valuable for both parties”, and Chile was happy to supply the US with more refined copper to support domestic manufacturing, he added.

Executives have raised concerns about the planned tariffs on the metal, and analysts have warned they will threaten key US industries from electric vehicles to data centres and defence.

Máximo Pacheco, chair of Codelco. The US accounts for 11% of the company’s cathode sales © Cristobal Olivares/Bloomberg

Chile has a trade agreement with the US and accounts for more than 60 per cent of American imports of refined copper.

“If the US really wants to develop more manufacturing of copper products, it is clear to us that they will need more copper cathodes,” Pacheco said, referring to a type of refined metal that can be used to make products such as wires and rods.

While the US produces some copper ore, it does not have enough smelting capacity to refine all the material that it consumes. 

It would be very difficult to quickly replace the imported refined metal with domestic production because smelters typically take several years to build.

The threat of levies also comes as the copper industry globally is struggling to boost mine supply, amid declining ore grades and rising costs that make it expensive to develop new mines.

Copper anodes loaded for shipment at a Codelco facility in Chile © Cristobal Olivares/Bloomberg

For Codelco the US accounts for 11 per cent of cathode sales.

“We don’t fully understand what it is that the US is trying to achieve with this announcement,” Pacheco said.

Analysts have questioned whether the White House will reduce the level of the copper tariffs, or make exemptions that lessen their impact. 

The US has walked back on several tariff initiatives, leading to the so-called “Taco” trade in markets, an acronym for “Trump always chickens out”.

One possibility is the US might impose levies on semi-finished products such as wires, tubes and strips but allow refined copper to enter without additional tariffs.

“If the [copper] tariffs go into effect, the domino effect on end users — such as data centres and the automotive sector — will be very strong,” said Gracelin Baskaran, director of the critical minerals security programme at the Center for Strategic and International Studies in Washington.

“Once the domestic industry feels the impact of tariffs they will very likely be revisited, because it threatens our [US] growth agenda,” she added.