Facing China's dominance in copper smelting and refining, the United States is trying to revive its domestic copper industry through tariffs and industrial policies. However, analysts believe that these 'tariff sticks' will not be able to force out domestic capacity in the short term. Instead, they may deter long-term investment due to frequent policy changes, and could even be a 'reverse cutback' for America's copper-intensive industries.
According to a report by the Hong Kong South China Morning Post on June 24th, as the United States and China compete for dominance in artificial intelligence, energy, and other strategic fields, at a deeper level of the supply chain, there is a less publicized but equally important contest underway: the battle for copper resources.
This seemingly ordinary metal has become one of the most important commodities in the 21st century. It not only powers servers, systems, and cooling infrastructure that support artificial intelligence, but it is also a key material for electric vehicle batteries and modern weapon-guided electronic equipment.
This growing importance may exacerbate geopolitical tensions. In February last year, U.S. President Donald Trump signed an executive order instructing U.S. Secretary of Commerce Wilbur Ross to investigate copper imports under Section 232 of the Trade Expansion Act of 1962, to assess whether they pose a threat to the U.S. economy and national security. This move aims to restore domestic copper production and reduce reliance on imports.
It is expected that Rutnick will submit a latest market assessment report to the White House by June 30 this year. The report will include the latest evaluation of whether it is necessary to impose new tariffs on refined copper imports. In a similar report last year, Rutnick recommended imposing a 15% import tariff on refined copper starting from January 1, 2027, and increasing it to 30% after one year.
Since August 1st last year, the United States has imposed a 50% tariff on imported copper semi-finished products and derivatives with high copper content. If the new tariffs are approved, they will be added to the existing 50% tariffs.
On March 6, 2026, local time, at Savaari Tata in Arizona, USA, at one of the open-pit copper mines of the Asako Company’s Mission Mine complex. Visual China
"Single foreign producer dominates global copper smelting and refining, controlling over 50% of the smelting capacity globally, and owning four out of the top five smelters worldwide." The White House wrote in an executive order in February 2025. This statement was repeatedly referenced in subsequent orders. Although the White House never specified which country, only one nation fits this description: China.
"The Trump administration is worried about China's dominant position in the copper refining and smelting industry," said Professor Liang Yan of William & Mary Economics, "Therefore, tariffs aim to reduce imports of refined copper and copper-intensive derivatives, but not raw copper, in order to boost domestic production capacity."
She pointed out that although China will supply only about 20% of the copper imported by the United States in 2025, China controls more than 52% of the world’s copper refining and smelting capacity. Moreover, since 2000, almost three-quarters of the growth in the global copper smelting capacity has been contributed by China. This increases the vulnerability of the United States in its supply chain. For a country that once dominated the global copper industry, this is a change of fortune.
A century ago, mines in Michigan, Arizona, and Utah contributed to America’s industrial growth, electrification, and wartime manufacturing. At that time, America’s copper smelting and refining plants were among the most advanced in the world.
Now, these advantages no longer exist. Liang Yan said that as processing capabilities have shifted overseas, the number of copper smelting plants still in operation in the United States has dropped from 16 to 2.
China has taken 20 years to secure a more stable position in the global supply chain. China used to rely heavily on imported copper ore, but through significant investments in resource-rich countries and steady expansion of domestic smelting and refining capabilities, it has become the world's largest producer of refined copper. At the same time, China has established a global network consisting of mines, processing facilities, and supply routes through strategies such as overseas investment, financing, and mining enterprises expanding abroad.
A Polish-based metal operator, AC Steel, reported in a report issued in June this year that China and the Democratic Republic of the Congo contributed approximately 60% of the world's refined copper production. In the first quarter of this year, their combined production increased by 9%, while production in other parts of the world decreased by 1.4%.
The South China Morning Post pointed out that in order to challenge China's dominance, the Trump administration is attempting to combine industrial policies with protectionist measures, in order to reduce reliance on external resources and encourage domestic investment.
Expectations of new tariffs have already had an impact on the global market. A report released by Goldman Sachs earlier this month stated that if the proposed tariffs in Washington come into effect, copper prices could soar above $14,000 per ton by the second half of 2026, leading to another wave of stockpiling by American buyers.
Currently, the spot copper trading price at the London Metal Exchange is approximately $13,650 per ton.
The Trump administration tried to stimulate domestic corporate investment in copper smelting and processing capacity through tariffs. However, in Liang Yan’s view, the constantly changing tariff policies create uncertainty for businesses, which in turn hinders long-term investment.
"Whether tariffs can be effective actually depends on whether they are just part of a broader industrial policy. Tariffs can provide some breathing space over a limited period of time, but they do not automatically increase domestic production in the United States," said Liang Yan.
Currently, U.S. policymakers seem to be aware of this dilemma, and incentives for domestic copper production have been increased. Since the beginning of this year, major projects including Resolution Copper, Copper World, and White Pine North in Arizona have received regulatory approvals, financing commitments, or strategic investments.
However, Liang Yan pointed out that the lengthy permitting process remains a major constraint. According to data from the U.S. Congress, it takes an average of 19.1 years for mining and smelting projects in the U.S. to be operational. By comparison, according to S&P Global Market Intelligence, the average time to operationalization for copper mines worldwide is 16.2 years.
In contrast, China has regarded copper as a key resource for over a decade. In 2016, the National Mineral Resources Plan (2016–2020) officially listed copper as a strategic mineral. The United States, on the other hand, did not include copper in its list of key minerals until 2025, enabling it to receive federal funding, research support, and simplified permitting procedures.
"Current U.S. policies give the impression of being reactive rather than proactive, usually driven by short-term trade disputes instead of a long-term vision on copper's role in energy transition." said Luke Balleny, Energy Minerals and Recycling Manager at World Resources Institute (WRI) Poorski Energy Center.
This means that without a clear roadmap, enterprises will be hesitant to invest in new smelting plants, reclaimed facilities, or long-term exploration. Barlenni wrote in his report last year, "Perhaps the most fundamental problem lies in the lack of coherent copper industry strategy in the United States. Unlike China's coordinated approach to mining, refining, reclaiming and trade under a unified framework, American policy remains fragmented."
To alleviate domestic bottlenecks, Washington is increasingly turning to partnerships and investment initiatives with countries such as Zambia and the Democratic Republic of Congo, in order to reduce its dependence on China's copper processing capabilities.
Just as Trump wants to make the U.S. copper industry "great again," the global market is facing a period of copper supply shortages. In September last year, the world's second-largest copper mine in Indonesia's Glasberg copper mine was shut down due to a mudslide accident. The Kalamoa-Kakula copper mine in Congo, one of the main sources of global copper production, also encountered difficulties, casting a shadow over the prospects for a recovery in copper production.
Goldman Sachs has delayed the global copper market’s full recovery to 2028. Earlier this month, Goldman Sachs lowered its forecast for global copper supply in 2026 by 350,000 tons, which is approximately 1.5% of the total global supply.
Meanwhile, the increasing number of AI data centers is reshaping demand. Standard & Poor’s Global estimates that the demand for copper in AI data centers will rise from 1.1 million tons in 2025 to 2.5 million tons by 2040.
Given the critical role of key minerals in industrial strategy and geopolitical competition, the tightening supply of copper and rising demand are causing Washington to become increasingly anxious.
However, Rogan Quinn, a senior research analyst for Rongding Group's Chinese operations, believes that compared to rare earths, refined copper is a bulk commodity traded globally. Its supply chain is more diversified, with a wider range of suppliers, and it usually flows to the market offering the highest bid.
"In the past twelve months, the premium on copper at the New York Mercantile Exchange demonstrates that copper will come to you if you pay for it," Quinn said. He simultaneously noted, however, that US domestic policy poses a greater threat to downstream copper-intensive industries than China's refining capacity does.
Quinn stated that the United States is expected to remain a net importer of refined copper for at least 5 to 10 years in the future. This means that if new trade barriers are introduced, the domestic industries in the United States will continue to be exposed to high costs.
If the United States imposes a tax on imported refined copper, this would in effect be taxing data centers, renewable energy sources, power grids, and other industries heavily reliant on copper. He added.
Barni believes that whether the United States can successfully rebuild its domestic copper processing capacity will ultimately depend on how much support Washington is willing to provide, because it is unlikely that private capital alone will be able to provide the required investment level.
