Swiss Gold Exports to US Plunge Amid Tariff Confusion

Swiss Gold Exports to US Plunge Amid Tariff Confusion

Switzerland, Europe's main gold refining center, experienced a historic plunge in gold exports to the United States in August. This was triggered by a US ruling to temporarily impose tariffs on gold bars, causing market panic. In early August, a US agency ruling clarified that 1-kilogram and 100-ounce gold bars (the most mainstream trading sizes in the US) would be included in reciprocal tariffs. This sudden policy shock disrupted the global gold market. Gold exports nearly halted, with customs data showing Swiss gold exports to the US plummeting 99% from over 30 tons the previous month to just 0.3 tons in August.

Response and Mitigation

Although the White House quickly responded, stating it would “clarify tariff-related misunderstandings,” and US President Donald Trump affirmed on social media a week after gold tax rumors surfaced that “gold will not be taxed,” the gold bar tariff exemption only officially took effect in early September. Only then did the gold trade chain gradually resume operation.

Impact of Tariffs on Switzerland

As the world's most important gold refining hub, Switzerland faces the highest US import tariff rate among developed countries at 39%. Record-breaking gold exports of $36 billion in the first quarter of this year accounted for more than two-thirds of Switzerland's trade surplus with the US. The impact of the tariff policy was fully evident in the August data: seasonally adjusted Swiss exports to the US fell 22% month-on-month, with the sharp drop in gold exports directly dragging down overall performance. Data from the Swiss Federal Customs Administration shows that total gold exports in August fell 19% month-on-month to less than 105 tons, but exports to China more than doubled to 35 tons, reflecting an emergency adjustment in the supply chain.

Vulnerabilities in the Global Gold Supply Chain

This tariff storm exposed vulnerabilities in the global gold supply chain. Since the London market uses a 400-ounce gold bar standard, and US COMEX futures require 1-kilogram or 100-ounce sizes, Swiss refineries have long played a crucial role in recasting European gold into US standard products. The disruption of Swiss gold exports due to the tariff ruling not only increased gold procurement costs in the US but also triggered a COMEX market squeeze risk.

Swiss Response Measures

Although the Trump administration ultimately exempted gold bars from tariffs, the Swiss government has initiated a response plan – including proposing the construction of refineries in the US to balance trade flows, while encouraging pharmaceutical companies to localize production to alleviate overall trade deficit pressure.

The Importance of Gold Refineries

Gold refineries play a vital role in the gold supply chain. They are responsible for purifying and converting raw gold into various forms, such as bars, coins, and granules, which are then used in industries like jewelry, electronics, and finance. Switzerland's expertise in gold refining has made it a global hub for this activity. The temporary tariff highlighted the interconnectedness of the global gold market and the potential disruptions that policy changes can cause.