By Daina Beth Solomon
SANTIAGO (Reuters) -Chile, Canada and Peru - three of the largest copper suppliers to the United States - have told President Donald Trump’s administration that imports of the metal from their countries do not threaten U.S. security interests and should not face potential tariffs.
The comments by the three countries come during an escalating tariff war between the United States and nearly every trading partner on which it relies. Copper is used in construction, transportation, electronics and many other industries. The United States imports roughly half of its copper needs each year.
Trump in February ordered a probe into possible copper duties under the Section 232 national security provision of the Trade Expansion Act of 1962, the same U.S. law he used in his first term to impose 25% tariffs on steel and aluminum.
Chile, Canada and Peru pushed back on the investigation in letters submitted in recent weeks to the U.S. Commerce Department that are now publicly available on a U.S. federal website.
The statements were echoed by Freeport-McMoRan (NYSE:FCX), one of the world’s largest copper producers, with operations in the United States, Chile, Peru and Indonesia.
Together, Chile, Canada and Peru supply 94% of U.S. imports of refined copper and copper alloys, according to data from information provider Trade Data Monitor (TDM). They are led by Chile, the world’s top producer that accounts for 70% of such imports, followed by Canada with 17%, and Peru with 7%. All three have free trade deals with the United States.
"Copper imports from Chile contribute to the United States’ supply chain security and do not represent any risk to its national security interests," Chile’s ambassador in Washington, Juan Valdes, wrote in a letter dated March 31.
The Trump administration has not detailed any results thus far of the February investigation, which seeks to curb China’s influence in the global copper market. Section 232 probes need to be completed within 270 days of their initiation, roughly by November.
The American Chamber of Commerce in Chile, which promotes free trade between the two countries, said that Chilean copper imports provide economic benefits to the United States, and that tariffs could wind up benefiting China.
Chile sends the majority of its copper exports to China, which consumes half of the world’s copper each year.
Canada’s government noted that maintaining free trade for copper would support U.S. security efforts because the metal is used by defense industries. Canada’s top mining group argued that tariffs could give advantages to China over the United States.
A letter from Peru’s foreign trade ministry also called for the United States to exclude the South American country from restrictions, noting that its copper imports posed no security risks.
Phoenix-based Freeport - which would benefit from U.S. copper tariffs but worries the duties would hurt the global economy - advised Trump to focus on boosting U.S. copper production.
"A global trade war could result in slower economic growth, increased mining input costs and reduced cash flow available for investment," the company wrote to U.S. officials.