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View all search resultsUS copper tariff poses a double-edged sword for Indonesian miners
In the longer term, the movement of copper prices depends on the resilience of US domestic demand.
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Workers at a mining site of PT Freeport Indonesia look at the Carstensz Pyramid in this undated photograph. (thejakartapost.com/Nethy Dharma Somba)
T
he United States plan to impose a 50 percent import tariff on copper starting on Aug. 1 could disrupt global trade flows, analysts warn. While the move may suppress demand and drive prices down in the long run, posing risks to local miners, it could also present an opportunity if Indonesia ultimately faces a lower tariff rate than rival producers.
Ahmad Zuhdi Dwi Kusuma, an industry analyst at state-owned Bank Mandiri, said the tariff’s short-term impact would likely be inflationary for copper prices, as global buyers rush to stockpile ahead of the deadline.
“Everyone will try to stock up in the US, making it harder for other countries to secure supply. That drives prices up,” he told The Jakarta Post on Wednesday.
Following US President Donald Trump’s announcement of the tariff, copper prices surged by 13 percent in a single day to a record high of US$5.69 per pound. According to financial data provider FactSet, it was the largest one-day increase in copper prices since records began in 1968.
However, in the longer term, the outcome depends on the resilience of US domestic demand. “If demand stays strong, prices will remain high despite the tariff. But if domestic manufacturing takes a hit, global demand could contract slightly, leading to a price correction,” Zuhdi said.
Indonesia, which exports little copper to the US, is shielded from immediate commercial disruption.
