The share prices of ASX mining shares are in focus after President Trump announced that tariffs were being implemented on foreign copper.
US tariffs on copper imports
In a bid to boost local copper production, Trump has announced that the US is going to place a 50% tariff on copper imports, as well as a tariff rate of 200% on pharmaceutical imports.
For those pharmaceutical businesses, Trump suggested they could have up to a year and a half to start producing their products in the US before the new tariffs occur.
According to CNBC, the US imports almost half of the copper it uses, with most of that originating in Chile, according to the US Geological Survey.
In February, the US administration started a review into tariffs on copper imports due to national security grounds.
Commerce Secretary Howard Lutnick told CNBC that the investigation has finished and the idea of the tariffs is to “bring copper production home”, which would put the tariff rate in line with the US tariff rate on steel and aluminium.
The US is one of the biggest users of copper because of the size of its population and economy.
It’s expected that the copper tariffs will be in place by the end of July.
How have ASX mining shares responded?
At the time of writing:
- The BHP Group Ltd (ASX: BHP) share price is flat
- The Rio Tinto Ltd (ASX: RIO) share price is up 0.2%
- The Sandfire Resources Ltd (ASX: SFR) share price is down 5%
- The Aeris Resources Ltd (ASX: AIS) share price is up 2.7%
Clearly, the market is negative on what this means for Sandfire. However, on the flipside, Rio Tinto has the Kennecott mine, a project which is just outside Salt Lake City, Utah, in the United States. BHP has an undeveloped project in Arizona that would also be helpful once fully operational.
Having a diversified production and customer base could be the best way to navigate the upcoming uncertainty, with Rio Tinto best-placed to navigate whatever happens next.
I think both BHP and Rio Tinto shares could be decent choices, under the circumstances. I don’t think the US administration will change their minds on tariffs for certain commodities.
