How to Lose Friends and Alienate People
President Donald Trump's recent announcement of a 50% tariff on imported copper has caused ripples through global markets. While the stated aim is to bolster US domestic industry, a closer look at the copper trade reveals that key players like Chile and Mexico are well-positioned to weather the storm. This highlights the potential for the US to isolate itself rather than strengthen its industrial base, especially given copper's fundamental and increasingly critical role in global electrification, technological advancement, and the infrastructure underpinning modern life.
Top officials in both Chile and Mexico have swiftly indicated their readiness to find alternative markets for their copper. This confidence stems from a crucial fact: the bulk of their copper exports already flows to China and other global destinations, not primarily to the US.
Chile, the world's leading copper producer, finds the US market plays a minor role in its overall export strategy. While it is the US's single largest copper supplier, its 2024 exports to the US of $6.21 billion (33% of US total imports) constituted less than 7% of Chile's total refined copper exports. Chilean Foreign Minister Alberto van Klaveren stated, "Chilean copper will keep finding new markets," emphasising that the US "doesn't have the capacity to replace the copper it imports." Chile’s diversified export base means that even with a 50% tariff, the vast majority of the nation’s copper production remains unaffected, allowing it to pivot supply to other eager global markets.
Similarly, Mexico, the third-largest exporter of copper products to the US in 2024 (worth approximately $980 million, mainly copper scrap for refining), is not overly reliant on the American market. Mexican President Claudia Sheinbaum has indicated that the country can redirect its copper shipments, noting, "Copper is needed in many places around the world, so there are some options there." Indeed, Mexico exports significantly more copper to China, with copper ores and concentrates sent there valued at $3.72 billion in 2024. The robust global demand ensures Mexican copper will continue to find buyers, minimising the tariff's long-term impact.
The US, by contrast, remains significantly import-reliant, bringing in 850,000 tonnes of refined copper in 2024, about half of its total consumption. Despite domestic production of 1.1 million tonnes, the US lacks sufficient refining capacity, operating only two primary smelters and facing years-long regulatory hurdles for new mining infrastructure. The recent surge in US copper imports, with 461,000 tonnes in the first four months of 2025 alone, underscores this reliance on foreign supply as industries scramble to front-load before the tariff takes effect.
Once implemented, these duties are expected to raise expenses and potentially disrupt supply chains for US sectors heavily dependent on copper, including, construction, electronics, and renewable energy, reducing their global competitiveness. Historical precedent offers a sobering lesson: tariffs have often failed to promote domestic industry, sometimes even hindering it by discouraging competition. The Smoot-Hawley Tariff Act of 1930 famously backfired, deepening the Great Depression.
The 50% copper tariff, while a strong declaration, appears to be a blunt instrument with limited long-term impact on resilient copper exporters. The true cost may be borne by US industries and consumers, highlighting how protectionist measures can backfire and inadvertently align with the very notion of "How to Lose Friends and Alienate People."
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