Gold refining may be the first victim of the installation of a high 39 percent tax on Swiss imports into the United States, as it was revealed that specific gold bars will be subject to the charge.
After US customs officials explained that gold bars weighing one kilogram or 100 ounces (2.8 kg) are subject to so-called reciprocal duties, the price of gold on the US futures market reached a record high on Friday.
The Financial Times was the first to report on the July 31 explanation late Thursday.
On Comex, the largest futures market in the world, one-kilogram gold bars are the most traded kind of bullion, and Switzerland is a significant producer of the bars on the physical market.
Expectations had been widespread in Switzerland that gold bars would be classified under a different customs code that excludes them from President Donald Trump’s sweeping “reciprocal” levies that went into effect on Thursday.
Swiss officials travelled to Washington this week in a bid to reach a deal similar to the European Union, whose products now face a 15-percent rate, but came back empty handed.
The news increased pressure on the Swiss government as gold trading weighs heavily on its trade balance.
Switzerland was foolish to think that gold would be exempt from US tariffs, according to John Plassard, head of investment strategy at Cite Gestion.
“The good reputation of Swiss refineries probably wouldn’t be enough to offset the 39-percent tariff,” he said, adding that some of the gold refining business would likely move to other gold industry centers like Antwerp.
When imported into the United States, gold bars made in Antwerp, Belgium, are subject to a 15% duty imposed on the European Union.
