An analysis suggests that the competition for dominance over the copper supply chain is emerging as a new front in the tech hegemony rivalry between the United States and China.

On Wednesday, local time, the South China Morning Post (SCMP), a Hong Kong-based media outlet, reported that as copper emerges as one of the most critical resources of the 21st century due to the artificial intelligence (AI) boom and rising battery demand, the U.S., which is striving to rebuild its domestic copper industry, is clashing with China, which has long dominated the global copper market.

Since taking office last year, US President Donald Trump has begun treating copper imports as a matter of national security.

Accordingly, a 50% tariff has been imposed on semi-finished copper products, which are industrial intermediates made by processing copper.

The administration is also reviewing the necessity of additional tariffs on refined copper.

Last year, US Commerce Secretary Howard Lutnick proposed in a related report to apply tariff rates of 15% in 2027 and 30% in 2028.

This move is interpreted as targeting China, which has been expanding its dominance in the copper supply chain, particularly in the smelting and refining sectors.

Lutnick is reportedly expected to submit an updated assessment of the copper market to the White House by June 30.

Copper is a key metal that powers AI servers, systems, and cooling infrastructure, as well as electric vehicle batteries and electronic equipment that runs modern weaponry.

With the explosive demand for AI data centers coinciding with the energy transition, demand for copper is projected to increase significantly in the future.

Liang Yan, an economics professor at Willamette University in the U.S., analyzed, "The Trump administration is concerned about China's dominance," adding, "The U.S. tariffs aim to boost domestic production capacity by reducing imports of refined copper and copper-intensive products."

According to her, the number of copper smelters in the U.S. has plummeted from 16 in the past to just two today, due to offshoring and other factors.

In contrast, China has focused on preempting the relevant market over the past two decades.

China has managed its copper supply chain at the state level early on, designating copper as a strategic commodity in its national mineral resources plan in 2016.

By aggressively investing in copper-rich countries and steadily building up its domestic smelting and refining capabilities, China has now become the world's largest producer of refined copper.

Chinese companies have secured stakes in Peru's massive Las Bambas copper mine and have become key participants in major copper projects such as Kamoa-Kakula in the Democratic Republic of the Congo (DRC).

Zijin Mining, a Chinese state-owned mining company, announced in April that it would invest approximately $1.5 billion (about 2.3 trillion won) to expand production after acquiring the La Arena copper and gold mine in Peru.

Consequently, analyses suggest that it will not be easy for the U.S. to reshape the supply chain in the short term under these circumstances.

It is known that it takes an average of about 19 years for mining and smelting projects in the U.S. to reach the production stage.

Supply disruptions are also a variable.

Production disruptions at Indonesia's Grasberg mine, the world's second-largest copper mine, and delays in the Kamoa-Kakula project are clouding the outlook for a recovery in global supply.

Under these circumstances, concerns are rising that China's weaponization of rare earths, which severely heightened tensions during the U.S.-China trade war last year, could be repeated with copper.

However, experts project that it remains uncertain whether copper can be immediately utilized as a strategic lever by China like rare earths.

Rogan Quinn, a senior research analyst with the consulting firm Rhodium Group, stated, "Unlike rare earth supply chains, copper supply chains are spread across different jurisdictions," adding, "As a globally traded commodity, copper will inevitably flow to the market offering the highest price."

He added that more aggressive U.S. policies could instead drive up copper prices, imposing a cost burden on copper-intensive industries.

Goldman Sachs predicted that if additional U.S. tariffs are implemented, it could trigger early stockpiling by U.S. buyers, potentially driving copper prices above $14,000 (about 21.58 million won) per metric ton in the second half of this year.

Currently, spot copper is trading at $13,650 (about 21.04 million won) per metric ton on the London Metal Exchange (LME).

(Photo: AP, Yonhap News)