World's top copper producer Chile in wait-and-see mode after Trump tariff bombshell
In a call with Reuters shortly after Trump's remarks, the chairman of Chilean state miner Codelco Maximo Pacheco said the firm wanted to know which copper products would be included and if the tariff would hit all countries.
"What we need to do is understand what this is about. What products are affected? Because he referred to copper in general terms. But copper includes a variety of products," Pacheco said on Tuesday in his first comments since the announcement.
"Then, we have to see whether this will apply to all countries or only some. We've always known that exceptions are made, and therefore, I think it's premature to comment."
US Comex copper futures jumped more than 12 per cent to a record high after Trump announced the planned tariffs.
Chile is the single biggest copper supplier to the US, a market that makes up less than 7 per cent of its refined copper exports. Chile sends much of its copper to China, which dominates global copper refining.
Still, SONAMI President Jorge Riesco said tariffs could cause market uncertainty and price volatility that could hit Chile and other supplier countries.
He said the high prices driven by US companies stockpiling copper ahead of possible tariffs were likely to be temporary, and warned that the US would struggle to expand its own supply.
"The US lacks the capacity for self-sufficiency and relies heavily on copper smelting and refining in China," Riesco said in a statement.
Chile's foreign ministry said the Andean nation had not received any formal official communication regarding the implementation of US copper tariffs.
"We continue to be in contact and dialogue on this and other matters with the competent authorities and technical teams," the ministry said in a statement.
Chile, along with Canada and Peru, had previously pushed back against a probe by the Trump administration into imports of the metal and said they should not face tariffs.
Codelco's Pacheco said the US would need growing amounts of copper, which goes into electric vehicles, military hardware, the power grid and many consumer goods.
"The United States is a country that needs a lot of copper, and it will continue to need even more copper," he said, adding it was getting harder to ramp up production. Codelco, the world's biggest copper producer, has seen output hit a 25-year low in recent years.
Pacheco estimated global demand would increase some 3 per cent this year, which was creating a supply gap on top of flat output.
"The global copper supply is increasingly hard to raise. In fact, I believe that this year, it will be hard to produce more copper than last year," he said. "We also have to consider the reality of what's happening in the market."
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