Trump Makes 50% Copper Tariff Official

President Donald Trump on Wednesday formalized a tariff on all copper imports, after posting about it on social media earlier in the month.

Trump’s proclamation will implement a 50% tariff on manufactured copper items such as pipes, wires, rods, sheets, tubes and electrical components beginning on Aug. 1. Unproduced copper materials such as ores or concentrates are not subject to the tariff.

Copper production is crucial to national security, Trump said, and this tariff is designed to bring manufacturing of the metal to the U.S. However, economists have suggested it could take years for new copper production to come online.

The proclamation also calls for the Commerce Secretary to develop a plan to include other copper derivative products in these tariffs and requires a quarter of U.S.-produced copper scrap to be sold domestically.

American manufacturers are highly dependent on copper imports. About half of U.S. demand is fulfilled by foreign copper, and economists said this tariff is likely to push up prices because a domestic alternative is not readily available.

Manufacturers will likely have to pay higher prices for imported copper from countries like Chile, Canada, Peru, and Mexico, economists said. They could then pass those costs on to consumers or scale back production because their input costs have risen.

Copper futures fell nearly 20% after the announcement. Shares of major copper producer Freeport-McMoRan (FCX) tumbled nearly 10%.