Trump administration plans to impose 50% tariff on copper pipes and wiring
By leaving out copper input materials such as ores, concentrates and cathodes, the new policy will fall significantly short of Donald Trump's initial threats to introduce a sweeping new levy on overseas shipments of the metal.
The surprise move dragged down US copper prices more than 17% on the Comex exchange and unwound a premium over the London global benchmark that had grown in recent weeks, with shipments diverted there in anticipation of higher domestic prices.
'Markets are now busily repricing refined copper much lower after Trump's epic backflip on his own import tariff policy,' said Tom Price, an analyst at the London brokerage Panmure Liberum.
'Someone must have finally got through to [Trump] that the US economy simply can't afford this new trade-hit.'
Freeport-McMoRan is likely to be among the most harmed by the trimmed tariff, according to RBC Capital Markets, with Hudbay Minerals, Arizona Sonoran and others developing mines in the country also affected.
The US president first teased the tariff in early July, implying that it would apply to all types of the red metal, ranging from cathodes produced by mines and smelters to wiring and other finished products.
Yet in a proclamation released by the White House, the administration said the tariff will apply starting this Friday only to pipes, tubes and other semi-finished copper products, as well as products that copper is heavily used to manufacture, including cable and electrical components.
In the executive order, Trump said Howard Lutnick, the commerce secretary, had concluded 'that copper is being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States'.
The move aids manufacturers, but does little to boost the constrained US copper mining industry, which for years has asked Washington for permitting reform or other steps that could fuel growth.
'Copper is being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States,' Trump said in his proclamation.
The tariffs will exclude copper scrap and copper concentrates, mattes, cathodes and anodes, some of the main products of copper mines and smelters.
The move is essentially a boost for Chile and Peru, two of the world's largest copper miners and major suppliers to the United States.
Reuters contributed reporting
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