Wall Street Journal

The US unexpectedly plans to impose tariffs on kilogram and 100-ounce gold bars imported from Switzerland. One-kilogram gold bars are the primary form of Comex trading and the mainstay of Swiss gold exports to the US. Cutting off this supply could push up New York gold prices in the short term.

The "reciprocal tariff" has officially taken effect, and Swiss gold bars have unexpectedly been included in the tax, giving gold prices renewed upward momentum.

According to media reports, on August 7th, local time, the US officially imposed import tariffs of up to 39% on Swiss goods. However, key gold bar sizes that were previously expected to be exempt were unexpectedly subject to tariffs.

According to media reports, in a July 31st letter responding to a ruling from a Swiss refinery, the US Customs and Border Protection (CBP) clarified that one-kilogram and 100-ounce gold bars should be classified under the customs codes subject to tariffs.

This decision stands in stark contrast to the widely anticipated exemptions in the industry and has created new pressure on US-Swiss trade relations. One-kilogram gold bars are the most common transaction on the Comex and the primary Swiss gold export to the US.

It is estimated that Switzerland exported $61.5 billion worth of gold to the US in the 12 months ending in June. If the 39% tariff rate were applied, Switzerland would now face an additional $24 billion in tariffs.

A document upends industry expectations.

The core of this tariff controversy lies in the reinterpretation of customs codes. In a ruling in response to a Swiss refinery's request for clarification, CBP clarified that one-kilogram and 100-ounce gold bars should be classified under customs code 7108.13.5500, which is within the scope of the tariff.

Previously, the gold industry generally believed that these bars were subject to code 7108.12.10. Christoph Wild, President of the Swiss Manufacturers and Precious Metals Traders Association, noted:

"The prevailing view was that precious metals remelted by Swiss refineries and exported to the United States could be shipped duty-free."

He added that the customs code classifications for different gold products "were not always so precise."

This discrepancy in expectations caught the Swiss refining industry off guard. According to media reports, several Swiss refineries said they had spent months working with lawyers to determine which gold products might be exempt.

Due to the heightened uncertainty, two refineries have temporarily reduced or halted gold shipments to the United States.

The "Triangular" Gold Trade Structure Has Been Upended

The new US tariffs have directly impacted the efficient physical flow of the global gold market.

The global gold bar trade has long formed a triangular route from London to New York, passing through Switzerland.

The London market prefers large gold bars weighing approximately 400 troy ounces, while the Comex, the world's largest gold futures market, prefers more manageable one-kilogram bars (roughly the size of a smartphone).

As the world's largest gold refining center, one of the core businesses of Swiss refineries is to remelt London's large gold bars and cast them into one-kilogram gold bars needed for the New York market.

This tariff, which directly impacts one-kilogram gold bars, effectively blocks a key route from Switzerland to New York, potentially forcing the market to seek more costly or less efficient alternatives, thereby reshaping the global physical delivery path for gold bars.

New York gold prices may rise in the short term.

Earlier this year, traders shipped large quantities of gold to the US to circumvent the Trump administration's tariff expectations, causing Comex inventories to reach record highs and a brief shortage in the London market.

However, this new tariff, which targets the bar sizes necessary to replenish inventories, could lead to a "only outflow" situation at the Comex, with no inflow, pushing up New York gold prices in the short term.

This development comes amidst an already historic surge in gold prices. Since the end of 2024, gold prices have risen 27%, reaching $3,500 per troy ounce. Concerns about inflation, worries about the level of U.S. government debt, and the weakening status of the U.S. dollar as a reserve currency have all contributed to the surge in gold prices. The U.S. tariffs have undoubtedly added another element of uncertainty to this already volatile market.