Tariff worries drive copper prices to record high
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Copper is trading at an all-time high.
Why it matters: A rise in the metal's price usually serves as an informal gauge of global economic growth, but right now Doctor Copper's diagnosis is muddled by U.S. tariffs and other supply issues.
The big picture: Because copper is a key input for so many things — machinery, electrical equipment, cars — an increase in prices can drive up overall inflation.
Zoom in: There's already a 50% tariff in the U.S. on semi-finished copper products like wires and pipes.
The intrigue: Refined copper — the raw metal traded on exchanges — is exempt from tariffs, but it's not clear for how long.
- The Trump administration said last year that it's considering putting a 15% tariff on copper starting next year, raising it to 30% in 2028.
- That has set off a scramble to import refined copper into the U.S. ahead of potential levies. As stockpiles build here, there's more competition for the supplies outside the U.S., driving up prices.
Zoom out: The AI buildout is also driving demand. Copper is a key input for AI data centers and the power grid, and data center construction is booming.
- Finally, copper output is down. Output from Chile, the world's largest producer, fell 9.4% in July from a year earlier after severe storms, per Reuters.
The bottom line: Merely the threat of tariffs is driving up prices for copper around the world.
