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By Giulia Carbonaro
Senior Reporter
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An increase in the Trump administration's tariff on imported copper, as announced by President Donald Trump earlier this week, could further strangle affordability in the already struggling U.S. housing markets, experts said.
The plan to implement a higher-than-expected tariff on the metal was announced by the president on Tuesday.
"Today we're doing copper," Trump said during a Cabinet meeting on Tuesday. "I believe the tariff on copper, we're going to make it 50 percent."
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A day later, he confirmed the copper tariff hike on social media, writing: "I am announcing a 50 percent TARIFF on Copper, effective August 1, 2025, after receiving a robust NATIONAL SECURITY ASSESSMENT."
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Copper, he wrote, "is necessary for Semiconductors, Aircraft, Ships, Ammunition, Data Centers, Lithium-ion Batteries, Radar Systems, Missile Defense Systems, and even, Hypersonic Weapons, of which we are building many. Copper is the second most used material by the Department of Defense."
The announcement caused an almost immediate spike in copper prices, which jumped by 2.62 percent.
Bringing Copper Production 'Home'
Copper is the third most-consumed metal at a global level after iron and aluminum, and the U.S. imports nearly half of it from abroad, mainly from Chile, according to data from the U.S. Geological Survey. While the metal is used in a variety of products ranging from machinery and electronics to household goods, the biggest use the country makes of it is for building construction.
"Copper is used in a variety of ways for home construction, and makes up a meaningful portion of the cost of building a home. Primarily, copper is used for electrical wiring, but also for plumbing and HVAC applications," Joel Berner, senior economist at Realtor.com, told Newsweek.
Imposing such high tariffs on copper is a bold move from the Trump administration, which wants to increase domestic production and become less reliant on imports of the metal.
"The idea is to bring copper home, bring copper production home, bring the ability to make copper, which is key to the industrial sector, back to America," Commerce Secretary Howard Lutnick told CNBC on Tuesday. The hike to 50 percent, he said, will bring copper in line with other key metals tariffed by the Trump administration, including steel and aluminum.
But experts think that before the Trump administration can boost up domestic production and realize its dream of bringing copper "home," the country will likely be facing a shortage of the key material. Meanwhile, it might spell trouble for the U.S. housing market.
"Tariffs on copper, lumber, steel, aluminum and other materials or products that go into building a home needlessly raise housing costs," Buddy Hughes, chairman of the National Association of Home Builders (NAHB), said in a statement shared with Newsweek.
The group, which counts 140,000 members, is calling on Trump "to recognize the importance of critical construction inputs for housing" as the country faces a housing affordability crisis, "and to pursue a tariff and trade policy that exempts essential building materials from levies that make housing more expensive for all Americans."
Higher Costs And Fewer Construction Projects
Berner agrees that higher copper tariffs will bring up prices for U.S. homebuilders. This would leave them with two options: pass on the additional costs to homebuyers or build less, a move that is likely to exacerbate the country's ongoing shortage.
"Increases to the price of copper stemming from tariffs will directly add to the cost of building a new home, meaning that fewer new homes make it to the market and the ones that do will be higher priced," Berner said.
"In a housing market already struggling with under-building and serious affordability concerns, this is bad news. Just since the Trump administration's announcement of a 50 percent tariff on copper imports earlier this week, the price of copper jumped to record levels. Builders and home renovators will now have to contend with higher material prices, and those costs will be passed along to homebuyers and homeowners."
On Tuesday, the U.S. copper price premium over the global benchmark surged 138 percent to a record high.
"Additional tariffs, without major increases in domestic copper production," Berner said, "will lead to builders forgoing projects or being forced to raise prices for homes."
"It's possible that if they [the tariffs] take effect and last long enough that they will increase the cost to build homes, resulting in few homes built—worse housing shortage—and higher prices," Chen Zhao, head of economics research at Redfin, told Newsweek. "The magnitude of the price effect depends on how much of the tariffs are ultimately passed on at each step of the supply chain."
But it will take some time for higher copper prices "to make it down the supply chain from the copper exporters, to the copper importers, to the importers of materials that use copper, to the builders," Zhao said.
It is also unclear whether the 50 percent tariff on copper is a definite plan of the Trump administration or whether it is "being used as a negotiating tactic to secure better trade deals for the U.S.," she added.
"There are also currently 50 percent tariffs on aluminum and steel, so it's possible the copper tariffs are meant to last. It's also possible that there will be carve outs for certain countries like Chile—the largest exporter to the U.S.—as part of any trade deals," Zhao said.
Update 7/11/25, 5:50 a.m. ET: This article was updated with comment from Redfin's Chen Zhao.
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