Trump Halts Penny Production Citing High Costs

2025-03-01

President Donald Trump has directed the U.S. Treasury to halt the production of pennies, citing their high manufacturing costs. According to a 2024 U.S. Mint report, it costs nearly 3.69 cents to produce a single penny, which is primarily made of zinc and coated in copper. Trump described the practice as “wasteful” and emphasized the need to eliminate such inefficiencies from the federal budget. However, the process of discontinuing the penny may require congressional approval, as the U.S. Mint derives its authority from Congress.

The debate over the penny’s utility and cost-effectiveness is not new. Critics argue that the coin has become obsolete in an increasingly cashless society, with 86.9% of U.S. transactions being cashless in 2024. Proponents of eliminating the penny also highlight the environmental costs associated with mining zinc and copper, as well as the coin’s diminishing value due to inflation. Some economists suggest that rounding cash transactions to the nearest nickel, as Canada did when it phased out its penny in 2013, could mitigate any potential inflationary effects.

On the other hand, advocates for keeping the penny, such as the organization Americans for Common Cents, argue that eliminating it could lead to a “rounding tax” on cash transactions, disproportionately affecting low-income consumers who rely on cash. They propose focusing instead on reducing the production costs of nickels, which currently cost 13.8 cents to mint.

While Trump’s directive has reignited the debate, historical attempts to eliminate the penny have faced significant opposition, including from lawmakers representing states with vested interests in the coin’s production. For now, the future of the penny remains uncertain, with its fate likely hinging on congressional action.

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