US Tariffs on Copper: A Double-Edged Sword

The US plans to impose a 50% tariff on semi-finished copper imports could adversely impact its industries more than reduce foreign dependence. Despite national security motives, the decision may raise costs across several sectors. India's trade, however, remains largely unaffected, according to GTRI.

President Donald Trump's decision to enforce a 50% tariff on semi-finished copper imports starting August 1, 2025, is under scrutiny by think tanks like the Global Trade Research Initiative (GTRI). The measure, sanctioned through a Presidential Proclamation and published on the White House's official site, aims to curb foreign dependence, citing national security under Section 232 of the Trade Expansion Act.

The proclamation intends to shield critical sectors such as defense, clean energy, and infrastructure from geopolitical vulnerabilities. However, GTRI argues that the policy might backfire, impacting U.S. industries adversely. Copper is an essential component in various sectors, including electric vehicles, power grids, semiconductors, and defense electronics.

According to GTRI, a sudden surge in copper costs will inevitably slow production, inflate prices, and hinder the country's clean energy transition. With India exporting USD 360 million worth of copper products to the US in the previous fiscal year, the impact might seem substantial but is balanced since the tariff is uniformly applied, making all international suppliers compete on an even footing. Although the move aims to protect the domestic smelting sector, it could inflict economic strain outweighing strategic benefits, GTRI concludes.

(With inputs from agencies.)