International News

US President Trump launches new investigation

Author : Bozhou Marine

Update time : 2025-02-27 11:46:27

On February 25, local time, according to Bloomberg, US President Trump has implemented the latest measures that may reshape the global supply chain, ordering the US Department of Commerce to launch a new investigation into possible new tariffs on copper imports to rebuild US copper production.

In the executive order, Trump said: The United States has abundant copper reserves, but our smelting and refining capabilities lag significantly behind global competitors. A foreign producer dominates global copper smelting and refining, controlling more than 50% of the world's smelting capacity and owning four of the top five refining facilities. This dominance, coupled with global overcapacity and a single producer's control over the world's supply chain, poses a direct threat to the national security and economic stability of the United States.

It is understood that China is the leading country in the global copper smelting and refining field. China's copper smelting capacity accounts for about 55% of the world's total capacity, and its refining capacity accounts for more than 40% (2023 data), and copper exports to the United States have continued to grow in recent years (about 8% of total exports in 2023).

If the United States imposes additional tariffs, China's exports of copper materials and copper products to the United States will face the risk of cost surges and order transfers, and may be forced to turn to Southeast Asian and European markets in the short term.

Trump named "more than 50% of the world's smelting capacity is controlled by a single producer", targeting China (China's copper smelting accounts for 50%-60% of the world). The United States may join forces with its allies (such as the European Union and Japan) to impose restrictions on China's copper smelting technology and equipment exports, and even promote the "de-China" supply chain reorganization.

However, China's external dependence on copper concentrate exceeds 80% (mainly imported from Chile and Peru). If the United States uses tariffs to force domestic copper production capacity expansion, it may intensify competition with China for South American copper resources and raise resource procurement costs.
At the same time, it will also have a chain impact on China's downstream industries.

First, China's new energy vehicles and photovoltaic industries rely on copper materials (about 60-80 kilograms of copper per vehicle). If the global copper price fluctuates due to the US tariff policy, the cost of batteries, cables, motors and other links may rise, weakening China's new energy export price advantage.

Secondly, China's electronics industry (PCB, chip packaging, etc.) consumes more than 3 million tons of copper annually. If the United States restricts the copper supply chain, high-end copper foil, copper alloy and other materials exported to the United States may be subject to targeted sanctions, affecting the supply chain security of Huawei, SMIC and other companies.

Finally, the United States may use tariffs to promote the "copper industry alliance" (such as wooing Chile and Peru), requiring copper mine exports to be tied to American smelters, squeezing the raw material sources of Chinese smelting companies, and threatening China's "mining-smelting-processing" integrated advantages in the long term.

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