Freeport-McMoRan Inc. (FCX, Financial), North America's largest copper producer, has expressed concern over the potential negative effects of proposed U.S. copper tariffs. Despite the intention to bolster the domestic copper industry, the company warns that such tariffs could harm the economy and reduce copper demand, ultimately impacting the industry adversely.
President Trump has threatened to impose tariffs on copper imports to revive domestic industries. However, Freeport's CEO, Kathleen Quirk, cautions that these tariffs could slow global economic growth, adversely affecting copper prices. The U.S. copper industry is currently experiencing turbulence, with many sectors relying heavily on copper, making tariffs costly for the economy.
The tariffs have already driven U.S. copper prices above international levels, with New York Commodity Exchange (Comex) prices exceeding those of the London Metal Exchange (LME) by approximately 9.3%. This price disparity has encouraged suppliers to expedite copper shipments to the U.S. before tariffs take effect.
While Freeport stands to benefit from higher domestic prices, Quirk remains neutral on the tariff policy, highlighting potential drawbacks such as reduced global demand. She advocates for alternative incentives to boost U.S. copper mining, like tax credits under the Inflation Reduction Act.
