
Trump's copper tariffs pile more metal misery on US auto industry
Trump
's threat of a 50per cent tariff on copper imports is raising alarm in the U.S. auto sector, as it could make it even harder for carmakers and suppliers to absorb border taxes and rising costs, executives and industry experts say.
The duties on their own may be manageable, but prices of the red metal vital for making cars, in particular in wire harnesses and in motors for electric vehicles, have soared to record highs.
The U.S. market is heavily reliant on imported copper, aluminium and steel, and developing new capacity could take years, so users are scrambling to buy metal from a limited number of suppliers, spurring price rises. Added to
import tariffs
on those metals, as well as higher prices in the United States, the extra costs are compounding the financial strain on carmakers and parts suppliers, interviews with a dozen executives, industry analysts and experts show.
Carmakers have so far been relying on inventories to avoid raising prices, but could be forced to pass on mounting import tax costs to consumers. Some like Ford and Toyota have already announced hikes to mitigate other Trump-induced tariffs, while Porsche expects a 300-million euro ($351 million) hit to results from tariffs for April and May alone.
"This (a copper tariff) complicates an already difficult situation" for the auto industry, said Daan de Jonge, lead analyst for copper demand and prices at Benchmark Mineral Intelligence.
Trump's announcement of the tariff this week propelled prices on U.S. platform COMEX to a record $5.6820 a pound or $12,526 a metric ton, a premium of more than $2,920 a ton over the price on the London Metal Exchange, currently around $9,600 a ton, which the market uses as the global benchmark. The rate is effective August 1.
The U.S. Midwest duty-paid aluminium premium paid on top of the benchmark LME price for physical delivery has tripled to 60 U.S. cents a pound since Trump was inaugurated. In the same period, the LME price has slipped 3per cent to $2,604 a metric ton.
U.S. top carmakers GM, Ford and Jeep maker Stellantis declined to comment for this story.
SUPPLIERS PASS ON SOME COSTS
After a chaotic week in the copper market, suppliers to carmakers have already asked their customers this week to pay more for their product because they cannot afford the additional costs, experts say.
A source at a major auto supplier in the U.S. market said the company had seen "meaningful" impact from elevated copper, aluminum and steel prices.
This creates both commercial friction and structural cost gaps, said the source, who spoke on condition of anonymity because they were not authorised to discuss the issue publicly.
Even before any tariff takes effect, users are paying more for their U.S. copper.
Takashi Imamura, an executive officer at Japanese trading house Marubeni said on Wednesday a copper tariff would mean higher costs for U.S. consumers.
"When they (the U.S. government) reconsider the damage, my final expectation is that they will reduce or eliminate the tariffs," Imamura said.
Parts suppliers are feeling the squeeze. Melanie White, president of suspension parts maker Hellwig Products, said steel prices have quadrupled since 2018.
Steel tariffs have caused a rush to source from U.S. providers, making it harder to secure supplies.
White said the roughly 50-person business has cut costs by putting off equipment purchases or not rehiring for certain vacant positions.
"It has affected a lot of things," she said.
COSTS
Benchmark's de Jonge said that at pre-tariff rates, steel, aluminium and copper accounted for around 5% of a vehicle's production costs in the United States.
With tariffs, that rises to up to 9per cent, he said.
Based on estimates from Cox Automotive and Benchmark Mineral Intelligence on tariffs already in place combined with the planned copper rates, the U.S. auto industry would pay on average minimum duty of $1,700 for every car made in the U.S. and $3,500 per car imported from Canada and Mexico that complies with the USMCA trade deal.
It would be as much as $5,700 for every car imported from elsewhere.
Those numbers add up fast in a low-margin industry where the average U.S. new vehicle selling price in June hit $46,233, according to consultancy J.D. Power.
Consultancy CRU Group estimates the average combustion-engine or hybrid car requires about 24 kg (53 pounds) of copper, while the average fully-electric car needs around 59 kg.
Dan Hearsch, global co-leader for automotive and industrials at consultancy AlixPartners, said supplier agreements tend to be indexed to
copper prices
and revised every few months.
But the spike in copper prices this week has forced auto suppliers to go to customers and "say, 'Hey, we need to talk about this on top of all our other tariff conversations,'" Hearsch said.
Some in the industry remain skeptical that the copper tariff will actually be implemented. Trump has a history of delaying or walking back tariff threats.
Andy Leyland, co-founder of supply chain specialist SC Insights, said that a copper tariff would likely be short-lived because higher inflation caused by border taxes will collide with the reality of the U.S. political calendar - where midterm elections will be held in November 2026.
"Most Americans don't really give a damn about foreign policy," Leyland. "Inflation is the only concern that people really have."

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Hindustan Times
19 minutes ago
- Hindustan Times
Motor racing-Different horsepower for Horner as Red Bull enter new era
By Alan Baldwin HT Image SPA-FRANCORCHAMPS, Belgium, July 27 (Reuters) - Former Red Bull team boss Christian Horner posted a video on social media of himself riding on horseback in the English countryside on the day of the Belgian Grand Prix. "Different horse power this Sunday," read the simple caption. Spa-Francorchamps marked the start of a new era for the former Formula One champions, the first race without Horner -- dismissed two weeks ago -- at the helm since Red Bull entered the sport in 2005. New boss Laurent Mekies started with a win, with Max Verstappen taking the Saturday sprint, and then a frustrating fourth place for the Dutch four-times world champion in the main Sunday grand prix. Japanese driver Yuki Tsunoda failed to score for the sixth race in a row. Apart from expressing surprise at the long delay in getting the race started, due to heavy rain, Mekies avoided any polemic. He blamed the team for Tsunoda's blank, saying the Japanese had done a great job in qualifying but was called in too late for his pitstop in a mistake that cost him three or four positions. "After two weeks at the factory, trying to meet as many people as possible, it was nice to also meet the race team," said the Frenchman when asked to assess the weekend. "To also enter into the race dynamics and see how the flows and the processes and preparation are. That was super-good in terms of getting to know the team. As you would imagine, it's a team where everything is done at the mega level." Horner's absence was the talk of the paddock but by the time the circus regroups in Budapest next week, the conversation is likely to have moved on. "I think Laurent is very good. The sport moves on quickly, so it probably won't be something that we're talking about come Monday," McLaren boss Zak Brown told Sky Sports television. "He (Horner) had fantastic results. It's a shame to kind of go out the way he did." Mercedes team boss Toto Wolff said earlier in the weekend that he would miss his old sparring partner and Netflix 'Drive to Survive' protagonist -- in a way -- and expected him to return sooner or later. "I don't think he's gone forever. I think he's going to pop up in some kind of other function," said the Austrian. (Reporting by Alan Baldwin, editing by Pritha Sarkar)


India.com
44 minutes ago
- India.com
No Entry For GM Crops, Says New Delhi; India-US Trade Talks Hit A Sacred Wall
New Delhi: Genetically modified (GM) crops will not be crossing India's borders anytime soon, no matter how urgently the United States knocks. As trade negotiations between New Delhi and Washington enter a crucial phase, insiders say one red line is not up for discussion. 'There are things that are not about negotiation. Some things are a matter of principle,' said a senior official close to the development. That principle, sources say, is GM corn and soy. While American negotiators have made agricultural access a central demand, pressing India for a wider entry gate for U.S. farm goods, New Delhi is not blinking, especially on GM imports. Over the years, the issue has mutated from a mere trade disagreement into a symbolic fight over sovereignty, food safety and grassroots politics. The United States Trade Representative (USTR) has repeatedly flagged India's restrictions on GM products, calling them 'non-tariff barriers'. But Indian authorities remain unmoved, largely because of the hardline stance taken by domestic groups closely aligned with the ruling establishment. Last month, the message from Sangh affiliates was if America insists on forcing GM crops into the Indian market, there may be no trade deal at all. Carried in Business Standard, that warning echoed the sentiments of influential groups such as the Bharatiya Kisan Sangh (BKS) and the Swadeshi Jagran Manch (SJM), which have long opposed agricultural concessions to Washington, particularly in sectors like dairy and GM crops. Their argument? Food security. The BKS has often warned that allowing U.S. crops into India, especially without clear labelling or transparency, could sabotage domestic farming ecosystems and compromise health safety standards. On the other hand, the SJM sees this as a direct attack on economic self-reliance. Meanwhile, the clock is ticking. U.S. officials have privately hinted at the urgency of the moment, pointing to a deadline set by President Donald Trump, who is seeking a revival of his trade agenda. Trump has marked August 1 as a red-letter day. If no interim deal is inked by then, India could be hit with reciprocal tariffs, potentially as high as 26 percent. Indian trade negotiators are not indifferent to that pressure. But according to officials involved in the process, the sixth round of talks will only happen in the second half of August after Trump's deadline expires. Any hope for a short-term resolution seems, at best, unrealistic. As one official put it, 'We are not looking at compromise in areas that touch the lives of millions.' In other words, GM corn is off the table. And perhaps, so is the deal, at least for now.


Economic Times
an hour ago
- Economic Times
U.S EU Trade deal: Who wins after tariff agreement - Donald Trump or Europe?
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads FAQs U.S EU Trade deal agreement has finally been chalked. In the end, Europe found it lacked the leverage to pull Donald Trump 's America into a trade pact on its terms and so has signed up to a deal it can just about stomach - albeit one that is clearly skewed in the U.S.'s favour. As such, Sunday's agreement on a blanket 15 per cent tariff after a months-long stand-off is a reality check on the aspirations of the 27-country European Union to become an economic power able to stand up to the likes of the United States or has long portrayed itself as an export superpower and champion of rules-based commerce for the benefit both of its own soft power and the global economy as a whole. For sure, the new tariff that will now be applied is a lot more digestible than the 30% "reciprocal" tariff which Trump threatened to invoke in a few it should ensure Europe avoids recession, it will likely keep its economy in the doldrums: it sits somewhere between two tariff scenarios the European Central Bank last month forecast would mean 0.5-0.9 per cent economic growth this year compared to just over 1% in a trade tension-free this is nonetheless a landing point that would have been scarcely imaginable only months ago in the pre-Trump 2.0 era, when the EU along with much of the world could count on U.S. tariffs averaging out at around 1.5%.Even when Britain agreed a baseline tariff of 10% with the United States back in May, EU officials were adamant they could do better and - convinced the bloc had the economic heft to square up to Trump - pushed for a "zero-for-zero" tariff took a few weeks of fruitless talks with their U.S. counterparts for the Europeans to accept that 10% was the best they could get and a few weeks more to take the same 15% baseline which the United States agreed with Japan last week."The EU does not have more leverage than the U.S., and the Trump administration is not rushing things," said one senior official in a European capital who was being briefed on last week's negotiations as they closed in around the 15% official and others pointed to the pressure from Europe's export-oriented businesses to clinch a deal and so ease the levels of uncertainty starting to hit businesses from Finland's Nokia to Swedish steelmaker SSAB ."We were dealt a bad hand. This deal is the best possible play under the circumstances," said one EU diplomat. "Recent months have clearly shown how damaging uncertainty in global trade is for European businesses."That imbalance - or what the trade negotiators have been calling "asymmetry" - is manifest in the final only is it expected that the EU will now call off any retaliation and remain open to U.S. goods on existing terms, but it has also pledged $600 billion of investment in the United States. The time-frame for that remains undefined, as do other details of the accord for talks unfolded, it became clear that the EU came to the conclusion it had more to lose from all-out retaliatory measures it threatened totalled some 93 billion euros - less than half its U.S. goods trade surplus of nearly 200 billion a growing number of EU capitals were also ready to envisage wide-ranging anti-coercion measures that would have allowed the bloc to target the services trade in which the United States had a surplus of some $75 billion last even then, there was no clear majority for targeting the U.S. digital services which European citizens enjoy and for which there are scant homegrown alternatives - from Netflix to Uber to Microsoft cloud remains to be seen whether this will encourage European leaders to accelerate the economic reforms and diversification of trading allies to which they have long paid lip service but which have been held back by national the deal as a painful compromise that was an "existential threat" for many of its members, Germany's BGA wholesale and export association said it was time for Europe to reduce its reliance on its biggest trading partner."Let's look on the past months as a wake-up call," said BGA President Dirk Jandura. "Europe must now prepare itself strategically for the future - we need new trade deals with the biggest industrial powers of the world."A1. President of USA is Donald Trump.A2. US is levying 15 per cent tariffs on Europe.