Trump orders US Mint to stop making pennies, but can he?

Nothing appears to be too big or too small to attract Donald Trump's attention for a radical reboot of how the United States works in his second term

Donald Trump is setting his sights on rebooting the United States in his second term as US president. Nothing appears to be too big or too small to escape his attention, including the humble penny. While it is the lowest denomination of US currency, there are an estimated 240 billion of them and billions more being minted every year.

However, that growing tally of “copper” coins may come to an end after Trump says he ordered the US Mint to stop making pennies. So, what is his beef with the 1-cent coin that bears the image of Abraham Lincoln?

Trump says minting pennies “is so wasteful!”

“Let’s rip the waste out of our great nations budget, even if it’s a penny at a time,” Trump said in a post on his Truth Social platform. “For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful! I have instructed my Secretary of the US Treasury to stop producing new pennies.”

Not to be a nitpicker, but it actually cost almost 3.7 cents to produce a penny in 2024 according to an annual report from the US Mint. That was a more than 20% increase over the previous year. Last year was the 19th consecutive year that it has cost more to produce a 1-cent coin than its actually face value.

What is driving up the price of making pennies? Among the reasons, while only 2.5% of a penny is made of copper these days, the rest is zinc, the price of the former raw material has been increasing. Average copper prices were up 5.4% in the 2024 fiscal year states the US Mint to a little more than $8,889 per tonne.

One of my (many) failures in govt was not getting rid of the penny. I tried—with President Obama publicly supporting the effort—and failed.(Personally would go further & shift to a single decimal currency with new penny’s as 1 cent & new nickels as 5.)https://t.co/tGmv0PfTWs

Trump isn’t the first to want to get rid of the penny

There have been calls from both Democrats and Republican politicians for decades to retire the US penny. However, inertia has kept the US Mint pumping out billions of the copper-plated coins to keep enough in circulation.

Despite there being nearly a quarter trillion of them floating around, over 720 for every man, woman and child in the US, most are kept in coin jars. Those who pay with cash will rarely use them at the check-out but expect to receive them as change and then just hold onto them. For the US Mint’s sake, they would prefer the vast majority stay in those coin jars as it would be “logistically unmanageable” if a modest portion of them were suddenly back in circulation.

While the feasibility of Trump’s proposal is being examined, whether he has the authority or he’ll need Congressional approval, there are other examples of countries close to home that have done away with their pennies. Canada began phasing out 1-cent coins in 2012 and required cash transactions to be rounded to the nearest five-cent increment.

The downside to that for the US is that making the nickel the lowest denomination coin for cash transactions would most likely be even more expensive than the penny problem. It would necessitate minting more of them as demand would most likely surge and it costs almost 14 cents to make each nickel according to the US Mint, nearly 9 cents more than their face value.