US President Donald Trump's plans to place hefty import tariffs on copper have already caused a spike in costs for American factories, with New York futures trading 25% higher than other global benchmarks on Tuesday.

The fresh spike in US prices came after Trump said he planned to place a 50% tariff on copper imports, doubling down on a threat he first made in February to impose targeted levies on the crucial industrial metal.

A 50% tariff would match duties he has already imposed on steel and aluminum in a bid to revive US production, but it would take a particularly heavy toll on American factories, which rely on overseas suppliers for nearly half of the copper they buy.

For months, the price of copper in New York has been ratcheting higher as buyers have raced to stock up before the levies are imposed. In the process, input costs for American manufacturers have surged above prices that their rivals pay in the rest of the world. The disconnect reached unprecedented levels on Tuesday, as Comex futures spiked to trade at a 25% premium to the global benchmark set in London.

US copper buyers have already sounded the alarm about the long-term threat that the levies pose, arguing that they risk undermining Trump's core ambitions to revive manufacturing and challenge China's industrial might.

"Any restrictions on US imports of copper cathode would merely redirect copper supply to China," a representative for top US copper importer Southwire Company LLC said in April in written comments to the US Commerce Department, which at Trump's request had been investigating whether to impose levies.

"At the same time, US copper producers would face significant shortages of supply, particularly in the short- and medium-term, as US copper production cannot increase fast enough to fill the supply gap."

Those warnings appear to have gone unheeded, with Commerce Secretary Howard Lutnick telling CNBC Tuesday that it concluded its investigation, and it's now up to Trump to decide what levy to charge.

Read More: US Copper Prices Surge to Record as Trump Calls for 50% Tariff

One consolation for manufacturers is that, for now, there's plenty of copper on US shores for them to buy — even if it does carry an eye-watering price tag. Traders have been shipping record volumes of copper to America to take advantage of the spike in prices, and there's now more copper stored in Comex warehouses than there is in the combined depots overseen by the London Metal Exchange and the Shanghai Futures Exchange.

Source: Bloomberg