Metal Tariffs Weigh Heavily on Manufacturing Supply Chains 

Geraint John

July 03, 2026 • 4 min read

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Back in February, supply chain leaders told us that tariffs and trade restrictions were the main external shock to business continuity they were concerned about in 2026. This week was a timely reminder of why it remains top of the risk agenda. 

Metals were the main focus on both sides of the Atlantic. First up, the European Union announced on Tuesday that it was following the US, UK and Canada in raising its tariffs on steel imports to 50% and slashing its annual duty-free quotas for key trading partners.    

In Washington, Tuesday was also the deadline for the US Department of Commerce to submit the findings of its investigation into whether proposed tariffs on refined copper should proceed. At the time of writing, no word from the White House on whether the report had landed on President Trump’s desk or his response to it. 

Adding to the volatility, his administration told reporters on Wednesday that it wasn’t inclined to renew the US-Mexico-Canada Agreement (USMCA) – which governs how steel, copper, and other products are treated for tariff purposes – in its current form, as officials from the three countries met to review it for the first time since it started on July 1, 2020. 

Another week, another wave of uncertainty around the new rules of global trade. 

Not So Copper-Bottomed 

In the case of copper, tariff uncertainty has fueled speculative activity in the commodity markets where refined ore is traded. The prospect of a 15% tariff on US imports from January 1, 2027, potentially rising to 30% in 2028, has driven up inventories (futures contracts) on the COMEX in New York by almost 300% year on year.  

Copper prices have also hit record highs during the past 12 months on the COMEX and the London Metal Exchange, which sets the global spot price. 

This may be good news for traders looking for arbitrage opportunities between the two markets and willing to bet on copper being more valuable under a new US tariffs regime. But it’s a more painful story for product manufacturers trying to manage their cost of goods sold.  

US-based companies already have to contend with the 50% tariff on semi-finished copper products (wires, tubes, pipes, rods, sheets) introduced in 2025. The US relies on imports to feed almost half of its annual copper supply needs, and demand is rising rapidly in growth sectors like AI infrastructure and electrified vehicles, which are significantly more copper-intensive than their legacy counterparts.   

Fanning the Protectionist Fire 

Like the EU, the US government says tariffs on steel, aluminum and copper are needed to safeguard national security and domestic producers – to “bring copper home,” as US commerce secretary Howard Lutnick put it last year.  

American copper smelters and refiners will no doubt welcome, as their European steel counterparts have, any added protection they get from foreign competitors. (For once, the primary target isn’t China – US copper supply chains are concentrated in the Americas and around 90% of its refined copper imports come from Chile, Canada, and Peru.) Yet this “national security” rationale masks a precarious reality: the US is structurally incapable of meeting its own demand through domestic production alone. 

In any case, such arguments don’t impress supply chain leaders. In our February survey of 100 CSCOs, 85% agreed (45% of them “strongly”) that “geopolitical meddling and economic nationalism are damaging global trade, increasing supply chain costs, and sapping profits.” 

Faced with both market volatility and protectionist policies, supply chains are having to get creative to secure critical materials, keep a lid on costs, and address longer-term structural issues. For copper, this includes a projected 30% supply shortfall by 2035. 

Less dependence on mining virgin material and much greater use of recycling – the “Renew” stage of Zero100’s Loop model – is a key route to developing local, sustainable supply. Copper is widely found in redundant buildings and machinery, and metal recovered through so-called “urban mining” activities can be processed without losing its conductive properties. But most American scrap is sent to China and Southeast Asia because of a severe shortage of domestic recycling capacity.  

Supply chains can do their bit to build this capacity and stoke demand, but these solutions remain a stopgap in the absence of cohesive industrial policy. Ultimately, true resilience requires a government-led framework that incentivizes domestic infrastructure investment.  

Until government policies shift from defensive trade barriers to industry-building incentives, sourcing leaders will be stuck managing price and supply uncertainty in critical metals supply chains.