Chinese “Copper” Dragon Takes Off 3: America Strikes Back

In the previous article, we discussed how China is seizing global dominance in the copper industry. Its successful industrial strategy involves ramping up production capacity at the expense of current profitability, accompanied by massive government subsidies; unfair (from the perspective of the “aggrieved” American side) practices of dumping and concealing product origin; and growing direct investments around the world, including in the U.S., which allows China to evade tariffs. This unified, coordinated strategy, combined with Beijing’s dominant demand for imports, systematically undermines U.S. competitiveness.

Even more alarming is that Chinese subsidiaries are exploiting loopholes in U.S. investment oversight. Since the Committee on Foreign Investment in the United States (CFIUS) rarely reviews greenfield projects, companies such as Boviet Solar, a subsidiary of Chinese copper producer Boway Alloy, have built plants in the U.S. using subsidies from the federal budget. In practice, this means that American taxpayers are funding China’s global dominance strategy.

Thus, China’s strategic investments in the U.S. exploit weak American controls over foreign investment exercised by the Committee on Foreign Investment in the United States (CFIUS), which is designed to protect against hostile takeovers of vital American companies. However, CFIUS often fails to cover investments in new enterprises—greenfields. This loophole allows PRC-linked companies to pose as ordinary investors while in fact advancing China’s state-driven industrial strategy. Through such investments, Chinese companies can access federal and state subsidies, embed themselves into American supply chains, and reduce the effectiveness of tariffs and other trade protection measures aimed at limiting their market share.

Currently, CFIUS has broad authority to review foreign acquisitions of U.S. companies for national security risks, including certain non-controlling investments in critical technologies, infrastructure, and sensitive personal data. However, assets related to copper extraction, smelting, and processing are not designated as critical infrastructure or critical technologies. As a result, CFIUS review is not automatically triggered when foreign firms invest in these assets.

The case of Boviet Solar, a subsidiary of Boway based in the PRC, illustrates this risk. Boway—a major Chinese manufacturer of copper and copper alloy semi-finished products—expanded into renewable energy through its Vietnamese subsidiary Boviet Solar. The company received government incentives, including a $500,000 grant in 2024 that could reach $20 million over the next seven to twelve years, to build a manufacturing facility in North Carolina. Because this was a new investment rather than an acquisition, it fell outside CFIUS’s oversight authority.

As a result, PRC-linked companies are directly integrating into the American copper and solar energy supply chains—two industries that are strategically intertwined, as solar panels and power systems are heavily dependent on copper materials. Without stricter oversight, other Chinese copper producers may replicate these strategies—receiving subsidies in some cases, bypassing tariffs in others—leaving critical sectors of the U.S. economy increasingly exposed to Beijing’s industrial strategy.

It should be recalled that the United States was once the global leader across the entire copper value chain—mining, refining, semi-finished goods, and finished copper-containing products—for much of the 20th century. However, although copper remains a vital material for manufacturing and for national and economic security, U.S. copper production has sharply declined. Today, China dominates global copper smelting and refining, controlling over 50% of global smelting capacity and four of the five largest refining enterprises.

To defend against the Chinese “copper dragon,” President Trump, by executive order on July 30, 2025, imposed a 50% import tariff on copper semi-finished and derivative products. This tariff supplements all other duties, fees, and charges applicable to such imported goods. Exempting refined cathode copper from the levy and simultaneously invoking the Defense Production Act to keep U.S. copper scrap within the country provided the nation’s smelters with the stability needed to remain competitive. For the first time in decades, companies now have a real opportunity to reinvest, expand, and sustain high-quality jobs that underpin America’s industrial base.

U.S. industrial circles consider the “copper” tariff a strong step but insist it must be followed by tougher investment measures. Washington must close loopholes that allow Chinese investments in new projects to evade government oversight. American industrialists urge policymakers to formally recognize copper as a “critical mineral” to accelerate domestic production. Furthermore, America must ensure that its own copper scrap supplies feed U.S. factories rather than fuel China’s excess capacity.

It is recommended that CFIUS review criteria be amended to include assets involved in copper extraction, smelting, and processing. This gap is especially pertinent for new enterprise investments, where PRC-linked companies develop facilities from scratch—projects often completely beyond CFIUS jurisdiction. Strengthening CFIUS by requiring scrutiny of both foreign acquisitions and new projects would close the loophole that currently allows China to embed itself directly into U.S. supply chains and would align with the Trump administration’s “America First” investment policy proposals.

The lessons of this “copper saga” are significant not only in practice but also in theoretical terms. It is time to acknowledge that chronic neglect by mainstream neoclassical theory of economic security and sovereignty issues has become an unaffordable luxury. Any economic theory that timidly sidesteps the challenges of strategic competition among nations can hardly deserve high public esteem or trust.