Global tariff hikes and country-by-country trade negotiations under President Trump in recent months have left many US electronics companies in a state of confusion over how to set prices for their goods or how much of the added cost they expect to absorb.
The arrival of an Aug. 1 deadline affecting the tariff rates in many countries was expected to calm markets and lead to some more clarity. However, one major presidential decision on Thursday to impose 50% universal tariffs on imports of semi-finished copper products set the electronics industry on edge. The Global Electronics Association, which represents thousands of companies, issued a pointed criticism.
“We are disappointed by today’s decision to impose a 50% tariff on imported copper foil and other essential materials critical to electronics manufacturing in the US,” the GEA said in a statement Thursday provided to Fierce Electronics.
“These tariffs will hit U.S. printed circuit board (PCB) fabricators especially hard by raising the cost of a critical input that can make up 60% of a PCB’s value, much of which is etched away in the production process. With no scalable domestic supply, U.S. electronics manufacturers will face higher costs, delay investments, and potentially even cut jobs, jeopardizing U.S. competitiveness in the technologies that will power the 21st century.
“This move directly undercuts President Trump’s goal of rebuilding American manufacturing and promoting American exports in strategic sectors. We urge the Administration to exempt electronics-grade copper and adopt policies that lower costs, encourage domestic production, and strengthen the U.S. electronics supply chain.”
GEA, formerly known as IPC, claims thousands of members and partners and serves a $6 trillion market.
In a fact sheet issued Thursday, the White House authorized the Secretary of Commerce using the Defense Production Act to impose the 50% tariffs on semi-finished copper products, including copper wires and copper-intensive derivative products such as cables, connectors and electrical components, effective Aug. 1.
The president also authorized Commerce to require 25% of high-quality copper scrap produced in the US to be sold in the US “to improve access to this important feedstock for domestic fabricators and secondary refiners.”
Economists including Macquarie Group have estimated it will take at least until 2030 for the US become self-sufficient in copper.
The White House said the copper tariffs won’t stack on top of separate tariffs levies Trump imposed on auto imports earlier this year. If a product faces auto tariffs, important taxes on vehicles will apply and not the copper duty.
The US does mine copper and produced 850,000 metric tons last year, but its consumption of refined cop9per was double that amount, according to the US Geological Survey. That means imports are vital. Chile recently provided 65% of refined copper to the US , with 17% from Canada, 9% from Mexico and 6% from Peru. The US has the world’s seventh-largest reserve of copper, behind Chile, Australia, Peru, DRC, Russia and Mexico.
Only two US smelters of copper are active: McMoRan in Arizona and Rio Tinto in Utah. Grupo Mexico has a facility in Hayden, Arizona, which is idle since 2019. Bloomberg and other reports have detailed the outlook for US copper production.
Despite the president’s reasoning for the 50% tariffs, copper futures prices plunged 20% on Thursday. Many analysts expected the tariff rate to be half as big, although the 50% number is the same as the tariff on steel and aluminum.
The broad range of tariff announcements that took effect Aug. 1 and a July jobs report lowered markets early Friday. The president set of a 10% global minimum tariff, although the average across countries is closer to 15%. Canada is one of the hardest hit at 35%, while Switzerland is at 39%. Japan is 15%, while Vietnam is 20%, India is 25% and South Korea is 15%. Malaysia, Camboia and Indonesia are each 19%, while Brazil is 40%.