Peru Holds Rates Steady as Copper Faces U.S. Tariff and Local Blockades

Peru’s central bank kept its key interest rate at 4.5% in July 2025, signaling caution as the country faces growing economic risks. Inflation remains low at 1.7%, and the bank wants to see more data before making changes.

This decision comes as Peru’s most important export, copper, faces two major threats at once. The United States will impose a 50% tariff on copper imports from Peru starting August 2025.

While the U.S. only buys about 2.4% of Peru’s copper, worth $705 million in 2024, the sudden cost increase could force Peru to find new buyers and may lower export earnings.

Most of Peru’s copper goes to China, but the U.S. is a key market for higher-value copper products. At the same time, thousands of informal miners in Peru are blocking roads to protest new rules requiring them to register and follow stricter standards.

These blockades have disrupted shipments from some of the country’s largest mines. Out of more than 82,000 registered miners, only 2% have met the government’s requirements so far. The government extended the deadline, but many miners say they cannot comply quickly.

Copper makes up nearly 30% of Peru’s exports, bringing in $23.45 billion in 2024. Mining investment reached $4.96 billion last year, and the government expects copper production to rise to 2.8 million tonnes in 2025. But these forecasts now look uncertain.

The government cut its 2025 growth forecast to 3% from 3.5%, citing weaker activity and global troubles. Peru’s finances remain stable for now, with a projected fiscal deficit of 2.4% of GDP and manageable public debt.

Peru’s situation shows how quickly outside trade decisions and local unrest can threaten a country’s economic backbone. As global demand and local supply both face new pressures, Peru’s copper industry—and its wider economy—stand at a critical crossroads.