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US-China trade war
EconomyChina Economy

Trump’s copper tariffs fail to stop US metal being shipped to China

The president wants to use tariffs to revive the US copper industry. But American dealers are still sending shiploads of metal to Asia

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Copper rods are wound at a copper recycling plant in eastern China’s Anhui province. China continues to source large amounts of scrap metal from the US. Photo: AFP
Ralph Jenningsin Alameda, California

Aaron Forkash, a scrap metal dealer based in California, plans to continue exporting copper to Asia even after US President Donald Trump’s new 50 per cent tariff on the metal comes into force on August 1.

The Trump administration has said the import duty will help revive the US copper industry by making it more profitable to produce the metal at home.

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But the truth is that it is actually cheaper and easier for American scrap dealers to ship copper to China and other Asian economies than to another part of the United States – and that is unlikely to change after the tariff kicks in, dealers said.

“I don’t know how tariffs are going to work,” Forkash said. “All I can do is compare (prices) on a day-to-day basis.”

Many other American scrap dealers are also expected to continue exporting to copper-hungry China, analysts said, as the tariffs are unlikely to resolve fundamental issues in the US metals industry such as a lack of processing capacity.
That means China – the world’s top importer of processed copper – should still be able to get the metal it needs once the supply diversions caused by a surge in US copper deals ahead of the new tariff taking effect subside.

The US has long been heavily dependent on imports of copper – a highly conductive metal used to make everything from microchips to car engines – with American manufacturers mostly relying on shipments from South America.

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Meanwhile, US scrap dealers like Forkash find it easier to sell their metal to overseas buyers, as they can save money by shipping copper to Asia on “backhauls” – meaning ships returning to their points of origin after delivering goods to the US.

Shipping copper domestically is not only more expensive, but also complicated due to a lack of copper processing capacity at home and a reluctance among US traders to buy scrap copper for fear that it may be sourced from stolen electrical parts.

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