Chile supplies about 25 % of global copper, a critical resource for AI and green energy.
U.S. President Donald Trump announced a 50‑percent import levy starting August 1.
Chile seeks a last‑minute deal to keep the tariff from stalling its exports.
Impact on the United States
The U.S. imports roughly 45 % of its copper, with 51 % coming from Chile.
Trump described copper as “the second most used material by the Department of Defense,” essential for semiconductors, aircraft, missiles, and data centers.
Analyst Andy Cole warned that a tariff would raise U.S. production costs and could spur demand for domestic copper, but the U.S. has “no capacity to increase production overnight,” meaning consumers may bear higher prices.
Juan Carlos Guajardo estimated the U.S. would need to produce 600,000–800,000 tons annually to stay competitive, a feat that could take at least ten years.
Impact on Chile
Chile’s copper exports contribute 10–15 % to its GDP.
Finance Minister Mario Marcel cautioned about “medium‑term” damage from a 50‑percent tariff but suggested diversification could mitigate long‑term harms.
Chile could redirect copper to Southeast Asia, India, or Europe, while China remains the top buyer (52 % of Chile’s 2024 copper, $26 billion).
U.S. imports from Chile were $5.8 billion in 2024, followed by Japan ($5.3 billion) and South Korea ($2.8 billion).
Other importers besides the U.S. could benefit from the tariff hike, according to UC Berkeley economist Maurice Obstfeld.
Current Negotiations
Chile has not been officially notified of the August 1 tariff start date and hopes to avoid it.
Chile’s foreign ministry said confidential talks with U.S. delegates would continue to the last minute.
Marcel said copper itself is not formally on the negotiating table but will likely be included, citing “exceptions have been made in other agreements.”
Market Reaction
After Trump’s announcement on July 8, copper prices reached record levels in New York.
U.S. buyers stockpiled the metal before August 1, paying prices sometimes as much as 30 percent higher than in London.
