US President Donald Trump has ordered the Treasury to stop minting new pennies, citing their high production cost as “wasteful.” The move has sparked debate about the value and necessity of the one-cent coin.
According to the US Mint, each penny costs nearly four cents to produce due to raw material and moulding process expenses. In 2024, over 3.2 billion pennies were minted at a production cost of $12.8 billion. Despite being worth only one cent, the penny has become virtually obsolete in retail transactions.
Trump’s move is part of his efforts to “rip the waste out” of the nation’s budget. Critics argue that scrapping the coin could lead to higher prices due to businesses rounding off prices without the penny. However, most economists say losing the penny would have a negligible effect on consumers, as cashless transactions dominate.
Canada, New Zealand, Australia, and the Netherlands have all phased out their smallest-denomination coins, saving millions annually. The US has long debated eliminating the penny, with Arizona Congressman Jim Kolbe leading decades-long efforts to scrap it.
It’s unclear whether Trump’s order is lawful without Congressional approval, but legal experts say he could direct the treasury secretary to stop producing pennies. Phasing out the coin raises questions about rounding cash transactions and existing penny collections.
Source: https://www.aljazeera.com/news/2025/2/14/why-is-donald-trump-discontinuing-the-penny