Copper Tariff Announcement May Increase Electronic Component Costs

On Tuesday, July 8^th, the U.S. Administration announced a potential 50% tariff on imported copper, according to Reuters. While the actual rate and effective date have yet to be released, the announcement alone has led to a visible increase of over 12%, a record high, above $12,330 per metric ton in the raw material cost of copper.

As almost 70% of global copper produced is used in electrical/conductivity applications and communications, this proposed tariff has the electronics industry closely monitoring the potential impacts. Moreover, 14% of copper usage is for electrical equipment which provides circuitry, wiring, and contacts for appliances and consumer electronics.

Copper Tariff Impacts on Electronic Components

The proposed tariff has raised concerns about supply chain disruptions and increased electronic component costs for U.S. manufacturers who rely on imported copper. For the electronics sector, which heavily depends on copper for components like printed circuit boards (PCBs) and wiring, a higher copper tariff could lead to significant cost increases. According to a study from the Harare Institute of Technology, printed circuit boards contain about 20% copper by weight. Any increase in copper commodity prices may lead to increased costs for PCBs, and other electronic components. Companies may need to reassess their sourcing strategies, potentially shifting to domestic suppliers or exploring alternative materials. However, such transitions could take time and may not fully offset the impact of higher tariffs.

Measure Copper Tariff Impacts on Your Bill of Materials

The latest news highlights the importance of assessing the potential impacts of supply chain disruptions on your bill of materials. Access to critical information enables business to proactively mitigate risks. SiliconExpert’s strategic minerals, as part of the supply chain suite of risk management tools, provides critical insights into component sourcing and materials make up, helping businesses navigate challenges like changing tariffs.

Specifically, manufacturers can identify how much copper by weight is contained in their list of components. Manufacturers can also utilize SiliconExpert’s expansive part library to find additional sources and identify alternate components with less copper.