The Peter Zeihan Podcast Series - Copper Imports Slapped with 50% Tariff || Peter Zeihan

Episode Date: July 22, 2025

We’re excited to announce our next Live Q&A for the Analyst members on Patreon on Wed, July 30! Join the Analyst Tier in July and we'll donate your membership fees to MedShareJoin the Patreon here: https://www.patreon.com/PeterZeihanMore info on MedShare here: https://www.medshare.org/disruptions-in-humanitarian-aid-zeihan/ Full Newsletter: https://mailchi.mp/zeihan/copper-imports-slapped-with-50-tariff

Hey all, Peter Zine here coming from Colorado hiking season. Unfortunately, I can still get the news. So I know that we now have a 50% tariff courtesy of Donald Trump that is going to be coming to U.S. copper imports beginning August 1. Let's say that you are someone who is really concerned about the U.S. copper industry. I am not. I'm really not. But if you are, there are a few things that you do before you get larger volumes of copper from domestic production. Number one, you go out and explore to find the deposit you're after.

Number two, you build physical infrastructure, road and rail, to get to that system that can handle heavy freight. Third, you build a processing facility to separate the copper ore from the rest of the rock, and then an intermediate processing facility to turn it to something called blister copper, which is roughly 98% pure. It gets rid of a lot of the sulfur. You then take that blister copper and you take it to another facility that you need to build. That's a proper smelter that will turn it.

into like, you know, the reddish-orange, shiny stuff that you use in everything. And then copper then goes on to be in almost everything that involves electricity. So it is an important material. But putting a 50% tariff on it on the front end retards that entire process. And from start to finish, that entire process takes somewhere between 10 and 15 years. So if your goal was to facilitate copper production, step one would it be offer, say, tax credits for exploration? go ahead and build the physical infrastructure and get started on the smelters. All of that is very power-intensive, so you all sort of need some more electricity.

By putting the tariff on the front end, you're basically retarding the whole process rather than speeding it. That's problem one. Problem two is that the Chinese are literally dying out, and while they are big players in the copper sector, and that will have to be shook out at some point. That's not my primary concern at this point. my primary concern is we have a limited amount of time in the United States to build out our industrial plant to prepare for the Chinese just not being there. And that means roughly doubling the size of the industrial plant.

And for that first stage, doubling the size, these are four main inputs that you need. The first one is copper. That now costs 50% more than it used to, or it will on August 1. The second item is steel primarily, but not exclusively, for structure. and interior structure support, I think eye beams. That, courtesy of an existing Trump tariff, is now 50% more than it used to be. Third is aluminum, primarily, but not exclusively used in cladding, and especially HVAC systems. That is now 50% more than it used to be because of Trump tariffs.

And the fourth thing you need is a labor force that's willing to do the construction work. Now, in the United States, historically, for the last 40 years, most of that work has, been done by immigrants from Mexico and Central America. But if you may have noticed, the Trump administration has basically launched a program against illegal migrants. Now, I don't want to get into a broad debate of the pros and cons of immigration at this moment, but let's just talk about where this policy in its current form leads. The Trump administration wants to deport about a million people a year, which carried out for a few years, would basically remove the illegal migrant community in its entirety. Construction,

is the industry that they are most involved in. Agriculture is number two. And what the Trump administration has discovered is that going after people who have committed crimes is actually kind of hard because it's a law enforcement issue and you have to do investigations and arrest them one at a time. That's not going to get you to a million people. So instead, they're going after people that they know about. They're going to churches. They're revoking legal status for people who say have been brought in from Venezuela or Haiti out of economic or political persecution, they're going to people's court hearings where they're going to get ruled on for, say, a green card and arresting them before they can be for the judge, because these are people where they know where they are.

So the four inputs that we need to prepare for a post-China world are now more expensive. And every time the cost of something goes up, you can do less of it. So if these policies continue for any appreciable amount of time, we can kiss that economic boom that I've been talking about for years goodbye because we will not have the industrial plant that is necessary to produce the goods we need to continue to lead the lives that we have been leading. It's almost as if a Russian agent was whispering things in Trump's ear and trying to convince him to do the things that would be most against our best interest.

Oh, wait.