Torsekar: Trump’s Copper Tariff is a First Step. Here’s What’s Needed Now to Counter China

The U.S. copper industry is in crisis — and Washington is finally taking notice.

With President Donald Trump’s recent announcement of 50% tariffs on copper imports under Section 232 of the Trade Expansion Act, the United States has correctly identified copper as a material of strategic national importance.

This is an encouraging first step. It safeguards U.S. copper mills from a flood of underpriced imports taking advantage of a broken market structure. For months, speculators and foreign competitors have been exploiting a growing price gap between the U.S. and global copper markets.

The benchmark price for copper in the United States, set by the COMEX exchange, has surged well above the global price set by the London Metal Exchange (LME). This gap — known as the COMEX–LME spread — has exploded by more than 100% since February, triggering a wave of arbitrage that is flooding the U.S. market with imported copper.

Meanwhile, speculative traders are buying cheap LME-priced copper abroad and rushing it into the U.S. to capitalize on the spread. In April alone, the U.S. imported more than 200,000 metric tons of refined copper— a modern record. COMEX warehouse inventories are at five-year highs. At the same time, U.S. imports of various copper-mill products (for example, bars, rods and profiles) have spiked by 2.8 million metric tonnes (52%) since February, according to the U.S. Census Bureau.

Further, because of limited domestic U.S. production of refined copper — the principal raw material for copper mills — U.S. mills rely on imports at inflated, COMEX-based prices.

To make matters worse, China — already the world’s largest copper refiner — is flooding the global market with excess supply. Its state-backed smelters have overbuilt to such an extent that they’re now operating at a loss just to maintain output. Refining fees have gone negative. This oversupply is dragging global copper prices even lower, while U.S. prices remain artificially high.

This combination of factors — COMEX–LME arbitrage, Chinese overproduction, and predatory pricing — is decimating U.S. copper mills. Simply put, foreign suppliers are undercutting American producers in their own market.

Today, copper is more vital than ever. It is powering America’s transition to clean-energy technologies such as electric vehicles, and it undergirds emerging technologies, including AI, advanced computing and data centers. It also plays a vital role in defense systems and power-grid modernization.

If America cedes control of its copper supply chain, it risks becoming dependent on geopolitical rivals for the very material that underpins its energy independence, national security and technological leadership.