US President Donald Trump is seeking to strengthen domestic copper production, but industry experts warn that tariffs and permitting reform will not fix the nation’s deeper problem: refining capacity.
The US holds 5.5 per cent of the world’s copper reserves, ranking sixth globally, yet remains heavily dependent on imports to meet its significant demand from the defence, energy and technology sectors.
In 2024, it imported 810,000 tonnes of refined copper worth an estimated US$10 billion, a 5 per cent increase compared with 2023. This dependence has become a key concern for the Trump administration, which has pledged to “bring copper home”.
US Commerce Secretary Howard Lutnick has turned to Trump’s favoured policy lever, saying the country must embrace tariffs to secure supply chains.
But industry veterans stress that tariffs alone cannot address the domestic sector’s entrenched challenges, particularly in refinery infrastructure and long project permitting cycles.
In July, Trump announced that an investigation under section 232 of the Trade Expansion Act 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 White House responded by imposing 50 per cent tariffs on imports of semi-finished copper products, including wires, rods, sheets and derivative products for construction and manufacturing.
While tariffs on refined copper were expected, the administration instead introduced a phased strategy: a 15 per cent universal tariff beginning in 2027 and 30% from 2028.
The decision caused copper futures to nosedive, with prices collapsing from US$5.63 to US$4.35 in a single day at the end of July, marking the steepest one-day drop on record.
Jeffrey Lorch, a partner at McKinsey, explained the dramatic fallout: “Because people expected tariffs, there was a lot of advanced purchasing of copper to try to build up a stockpile; they expected that this tariff would move to an import parity situation, which would allow a buck to be earned on this stockpile.
“What actually happened was that the tariff announced was underwhelming.”
The collapse in futures reflected reduced confidence in the tariffs’ ability to spur domestic copper.
Analysts noted that the measures were more about safeguarding supply chains than building refining strength, with the administration also weighing requirements for domestic copper sales and export controls for high-quality scrap.
The US copper sector is set for production growth. GlobalData projects a 6.5 per cent compound annual growth rate in domestic mining output between 2024 and 2030, supported by planned expansions at Freeport-McMoRan’s Bagdad and Lone Star mines in Arizona.
These projects could add more than 270,000 tonnes annually once operational in the late 2020s and early 2030s.
But increased production does not resolve the refining challenge.
As Gayathri Siripurapu of GlobalData noted: “Despite this robust growth, domestic refining capacity remains inadequate to meet demand, with a widening supply gap.
“This gap poses a strategic vulnerability, intensified by global competition for copper driven by the energy transition.”
China dominates global refining, with state-backed smelters controlling 97 per cent of the world’s capacity.
Since 2019, China has added almost 11 million tonnes, representing 80 per cent of new global capacity.
US smelters, by contrast, are few: Rio Tinto’s Kennecott smelter in Utah, Freeport-McMoRan’s Miami facility in Arizona, and the long-idled Asarco smelter, closed since 2019.
Ian Lange, an economics professor at the Colorado School of Mines, cast doubt on prospects for a US smelting revival.
“The US will have to compete with the Chinese smelters that are being built, which are going to have nearly zero cost of capital and some implicit government subsidy through sales to downstream manufacturers.
“If you are competing with them, well, good luck to you.”
The US had 55 million tonnes of copper reserves last year, but restrictive permitting processes remain a brake on development.
Approvals under the National Environmental Policy Act (NEPA) can take up to a decade and are often slowed by appeals and litigation.
To address delays, the Trump administration has expanded the use of the FAST-41 regulatory streamlining program.
Ten copper projects now benefit from “covered” status for fast-tracked reviews, while others fall under enhanced transparency provisions.
Lange believes this marks cautious progress, saying that current reforms reflect “all the talks going in the right direction towards faster permitting, and there are fewer concerns about double-checking environmental impact statements”.
Nevertheless, experts warn that even with permitting improvements, scaling up refining capability will remain the critical challenge.
Siripurapu concluded: “The US is laying groundwork for growth in domestic copper mining and refining, but meeting full demand domestically will take years, requiring large investments, regulatory streamlining and expanded recycling efforts.”
Despite sizeable reserves, tariff interventions and accelerated permitting, the US still lacks the copper refining backbone needed to secure true domestic supply chain independence.
With demand set to rise steadily and Chinese smelters dominating the global market, bridging this gap could take decades.
For now, Washington’s ambition to bring copper home may run up against smelting’s unyielding economics, raising doubts as to whether tariffs can ever deliver the self-sufficiency Trump envisions.
