U.S. President Donald Trump speaks at the White House in July. Most of the Canadian companies affected by Mr. Trump's plans to impose copper tariffs are those with operations in the east.Andrew Harnik/Getty Images
U.S. President Donald Trump plans to impose tariffs on copper imports, potentially piling even more pressure on a Canadian economy already reeling from levies on aluminum, steel and autos.
Mr. Trump told reporters at the White House on Tuesday afternoon that he plans to announce 50-per-cent tariffs on copper soon. The tariffs would be imposed on national security grounds and justified by the contention that the U.S. needs to boost domestic production of one of the most widely used metals in the economy.
The U.S. is a major market for Canadian copper exports, accounting for $4.8-billion, or 52 per cent, of all the country’s exports of the metal in 2023, according to Natural Resources Canada.
While the U.S. is a much bigger copper producer than Canada, it still relies heavily on copper imports from Canada to meet its needs. Canada last year accounted for 99 per cent of the U.S.’s imports of copper concentrate, a semi-processed form of the metal, according to the U.S. Geological Survey. Canada accounted for 17 per cent of its refined copper imports, second only to Chile.
U.S. President Donald Trump on Tuesday said he would impose a 50 per cent tariff on imported copper and soon introduce long-threatened levies on semiconductors and pharmaceuticals, broadening his trade war that has rattled markets worldwide.
Reuters
“As usual, President Trump has jumped the gun,” said Pierre Gratton, president of the Mining Association of Canada.
“This will hurt U.S. copper producers who sell concentrate to Canada and U.S. manufacturers who purchase Canadian refined copper products. It may inadvertently help Chinese refiners that operate newer, lower cost refineries.”
The U.S. consumer will also inevitably pay more because the tariffs will embolden domestic copper producers to charge more for their products, which have a multitude of industrial applications, said Stuart McDonald, CEO of Taseko Mines Ltd. TKO-T
“Copper is everywhere,” he said. ”It’s infrastructure, copper wiring, components in electric vehicles, renewable energy, substations and buildings.”
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In February, Mr. Trump launched a Section 232 investigation into copper imports, a formal step toward imposing tariffs under the U.S. Trade Expansion Act, but the status of that isn’t clear ‐ nor is it known when these levies would come into force.
Despite reaching a trade détente with Britain in June, Mr. Trump has once again ratcheted up his global trade war on many other countries. Earlier in the week he threatened to impose tariffs ranging from 25 to 40 per cent on more than a dozen countries, including Japan and South Korea, unless they cave to various demands, such as a requirement to boost their manufacturing operations in the U.S.
Mr. Trump on Tuesday also said he would impose new tariffs on imports of semiconductors and pharmaceuticals, threatening a 200-per-cent levy on medicines, unless drug companies “get their act together.”
Last month, Mr. Trump jacked up global tariffs on steel and aluminum imports from the 25-per-cent rate imposed in March to 50 per cent. Those tariffs disproportionately affect Canada because domestic companies rely heavily on the U.S. export market.
The threat of tariffs on Canada’s copper industry lands just as Prime Minister Mark Carney’s target deadline to reach a deal with Mr. Trump to end the trade war nears. During last month’s G7 summit in Alberta, Mr. Carney said he hoped to reach an agreement on trade and security with Mr. Trump in 30 days.
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One of the companies most vulnerable to a tariff on copper is Glencore PLC GLCNF. The giant Swiss mining company operates the Kidd Creek mine in Ontario, as well as the Horne smelter (Canada’s only copper smelter) and the Canadian Copper Refinery, both of which are in Quebec.
Mr. Gratton called the tariffs “very concerning” for Glencore.
Fabrice de Dongo, a spokesperson with Glencore Canada, in an e-mail to The Globe and Mail called the tariffs “an important issue for our business,” but he declined to disclose how much copper the company exports to the U.S. from Canada.
Copper mining operations in western Canada will be mostly insulated from the tariffs as they predominantly ship their metal to other markets.
Teck Resources Ltd. TECK-B-T sends the copper it mines at its Highland Valley mine in British Columbia, Canada’s biggest copper mine, to Asia and Europe.
Dale Steeves, a spokesperson for Teck, said in an e-mail to The Globe that the company doesn’t currently sell copper concentrate or finished copper into the U.S. and is unaffected by any potential tariffs.
Taseko Mines, operator of the Gibraltar mine in B.C., Canada’s second biggest copper mine, predominantly sends its copper concentrate to Asia for processing.
Mr. McDonald said that none of Taseko’s Canadian-mined copper is sent to the U.S.
In fact, the tariffs could end up being advantageous for the company because it is nearing completion of a new copper mine in the U.S. The Florence copper mine in Arizona is due to start producing before the end of the year. U.S. producers are already benefiting from a jump in the copper price, which spiked on Tuesday after Mr. Trump’s comments.
“So, with the tariffs, we could potentially with that new mine benefit from premium pricing,” he said.