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Trump's copper tariffs pile more metal misery on US auto industry
Trump's copper tariffs pile more metal misery on US auto industry
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By Nick Carey and Nora Eckert U.S. President Donald Trump's threat of a 50% tariff on copper imports is raising alarm in the U.S. auto sector, as it could make it even harder for carmakers and suppliers to absorb border taxes and rising costs, executives and industry experts say.The duties on their own may be manageable, but prices of the red metal vital for making cars, in particular in wire harnesses and in motors for electric vehicles, have soared to record highs.The U.S. market is heavily reliant on imported copper, aluminium and steel, and developing new capacity could take years, so users are scrambling to buy metal from a limited number of suppliers, spurring price rises.Added to on those metals, as well as higher prices in the United States, the extra costs are compounding the financial strain on carmakers and parts suppliers, interviews with a dozen executives, industry analysts and experts show.Carmakers have so far been relying on inventories to avoid raising prices, but could be forced to pass on mounting import tax costs to consumers. Some like Ford NYSE:F and Toyota TSE:7203 have already announced hikes to mitigate other Trump-induced tariffs, while Porsche XETR:P911 expects a 300-million euro ($351 million) hit to results from tariffs for April and May alone."This (a copper tariff) complicates an already difficult situation" for the auto industry, said Daan de Jonge, lead analyst for copper demand and prices at Benchmark Mineral Intelligence.Trump's announcement of the tariff this week propelled prices on U.S. platform COMEX (HGc1) to a record $5.6820 a pound or $12,526 a metric ton, a premium of more than $2,920 a ton over the price COMEX:HG1! on the London Metal Exchange, currently around $9,600 a ton, which the market uses as the global benchmark. The rate is effective August 1.The U.S. Midwest duty-paid aluminium premium paid on top of the benchmark LME price for physical delivery has tripled to 60 U.S. cents a pound (AUPc1) since Trump was inaugurated. In the same period, the LME price COMEX:ALI1! has slipped 3% to $2,604 a metric ton. U.S. top carmakers GM NYSE:GM, Ford and Jeep maker Stellantis MIL:STLAM declined to comment for this story.SUPPLIERS PASS ON SOME COSTSAfter a chaotic week in the copper market, suppliers to carmakers have already asked their customers this week to pay more for their product because they cannot afford th...