Executive Order: Threat to National Security From Imports of Copper Products
On February 25, President Trump issued an executive order (EO) requiring the US Department of Commerce (Commerce) to investigate the national security implications of the copper supply chain. The investigation will be based on section 232 of the Trade Expansion Act of 1962.
Section 1 of the EO reads as follows:
Copper is a critical material essential to the national security, economic strength, and industrial resilience of the United States. Copper, scrap copper, and copper’s derivative products play a vital role in defense applications, infrastructure, and emerging technologies, including clean energy, electric vehicles, and advanced electronics. The United States faces significant vulnerabilities in the copper supply chain, with increasing reliance on foreign sources for mined, smelted, and refined copper.
The United States has ample copper reserves, yet our smelting and refining capacity lags significantly behind global competitors. A single foreign producer dominates global copper smelting and refining, controlling over 50 percent of global smelting capacity and holding four of the top five largest refining facilities. This dominance, coupled with global overcapacity and a single producer’s control of world supply chains, poses a direct threat to United States national security and economic stability. (emphasis added)
The section 232 investigation, according to section 2 of the EO, covers raw mined copper, copper concentrates, refined copper, copper alloys, scrapped copper, and derivative products. The relevant factors for the investigation will include national defense, impact of foreign competition on the economic welfare of domestic industries, and factors outlined in section 2(b) of the EO.
The report from Commerce and other agencies is to be delivered to the president in 270 days. This report could recommend mitigation measures including tariffs, export restraints, and incentives to increase domestic production. Additionally, according to the EO, the report may also include policy recommendations for strengthening the US copper supply chain through strategic investments, permitting reforms, and enhanced recycling initiatives.
The EO targets China, which is seen by the current Administration as undermining the global economic viability of copper production through unfair trade practices, with devastating national security implications for the United States.
It should be noted that not every section 232 investigation has ultimately led to tariffs or other measures, including the investigation into the automobile industry during the previous Trump Administration.
The benefit of participation in the investigation must be determined on a case-by-case basis. This includes providing input to ensure that all relevant considerations are considered, such as potential exclusions by country of origin and certain product exclusions.
