While the initial headline of a “copper tariff” might sound straightforward, the reality is more complex. Not all copper products are equally affected by the Trump administration's recent actions.
Copper is vital to the U.S. economy and a key reason many investors ask, “Is copper a good investment?” From electric vehicles and renewable energy infrastructure to everyday electronics and construction, copper demand is everywhere. On August 1, 2025, the administration placed a 50 percent tariff on imported semi-finished copper products and copper-intensive derivative products, such as wires, pipes, rods, sheets, and various electrical components.
But the recent White House announcement held off on immediate tariffs for refined copper, known as copper cathode (the form investors can buy through Kilo Reserve). Instead, the administration plans a phased approach with 15 percent duties added in 2027, then an increase to 30 percent in 2028. While the goal is to give U.S. copper producers time to increase capacity, this creates long-term uncertainty for anyone considering portfolio diversification strategies through copper investing.
The tariff on semi-finished products has an immediate effect on their price in the U.S. market. Manufacturers who rely on these imports will face higher costs, which could be passed on to consumers or absorbed, squeezing profit margins.
The market widely anticipated that a significant tariff would be imposed on all imported copper, including cathodes. This expectation led to a rush of speculative buying. Traders and companies imported vast quantities of copper and stored it in the United States to get ahead of the expected tariff.
Widespread buying created an artificial supply-demand imbalance, driving the U.S. price of copper up significantly above the global price. At this point, the market was distorted. The U.S. price was artificially high due to the fear of a tariff, not because of a real, long-term shortage of copper for industrial use.
When the government announced that the tariff on cathodes would be delayed, the reason for the speculative buying disappeared. The U.S. price then corrected sharply, falling to a level closer to the global market price.
U.S. manufacturers of semi-finished goods are the immediate winners. With a 50 percent tariff on imported copper wire, tubes, and sheets, they are suddenly shielded from foreign competition.
While semi-finished manufacturers are protected, industries that use copper components, like construction, electronics, and electric vehicles (a major driver of copper demand in the energy transition), are now facing significantly higher costs. These businesses must decide whether to absorb the costs and squeeze their profit margins or pass them on to consumers, potentially raising prices for things like new homes and appliances.
Finally, the U.S. copper refining industry gains a temporary benefit by allowing it to import raw material cheaply. But future tariffs create an incentive to build new refining capacity to prepare for a future without a cheap foreign supply.
While the market dynamics may have temporarily lowered the price for copper, the reasons to buy remain. Beyond its key role in the transition to green energy, new megatrends are creating a powerful case for copper as a long-term investment.
Investing in physical copper as a long-term strategy is supported by global electrification, renewable energy infrastructure, and rising demand from EVs. Plus, the rise of artificial intelligence and an increase in military spending are further driving demand.
AI data centers require significant amounts of copper for power and cooling – more than 4.3 million metric tons of copper over the next decade, according to research firm BloombergNEF. Similarly, rising defense budgets around the world are increasing demand for copper in everything from bullet casings to jet fighters.
As market issues resolve and demand for copper grows, copper supply is expected to go from a surplus to a deficit of 1,438 tons by 2035, according to S&P Global Commodity Insights.
Currently, buyers have the chance to acquire a vital asset that's likely to be in high demand for decades, at a price that has been temporarily depressed by short-term political maneuvers. For investors exploring alternative investments, physical metal ownership offers stability and tangible value.
Copper cathodes (high-purity sheets that conform to international standards) offer unique advantages that other copper investment options like mining stocks or ETFs cannot. While ETFs or equities are tied to company performance, physical copper is a safe haven asset that keeps its value tied directly to global supply and demand.
Instead of buying a stock that represents a company that mines copper, you can own the actual metal itself. The advantages include:
Kilo Reserve makes investing in physical copper simple. With Phase 1 of our launch, you can now establish and fund your account and purchase copper over the phone. Later this year, with our Phase 2 launch in Q4, you will be able to view and manage your holdings through our secure trade portal.
Looking ahead, we are committed to expanding our investment options. In 2026, we plan to add additional metals and investment vehicles, including self-directed IRAs and offerings through Registered Investment Advisors.
When you own the actual metal, you keep your investment tied to copper's true value. Ready to explore copper as part of your portfolio diversification strategy? Contact us to learn more about how Kilo Reserve helps serious investors own secure, vaulted, physical copper today.