The Swiss Gold Tariff: A Hidden Battle for Control of Refining?
Switzerland's Outsized Role In Gold Refining Puts Them In The Crosshairs Heading Into The Reset
Last week, the US threatened to impose tariffs on Swiss gold imports, sending shockwaves through Switzerland—the heart of the world’s gold refining industry. While framed as part of a broader trade dispute, it exposes a long-standing divide within the gold market and highlights Switzerland’s pivotal role as a key chokepoint in the global bullion trade.
Up until the 1980s, London had been the epicenter of all things gold. The City of London Gold Fix, managed for decades by the Rothschilds, established the daily benchmark price for gold—making London the world’s most important gold market.
As demand grew for gold sourced through the City, it was decided that gold contracts would be settled using large 400-troy-ounce “Good Delivery” bars. These bars, roughly the size of a house brick, were designed to meet the needs of central banks and large institutional investors, making them ideal for storage in vaults and for handling significant transactions.
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“Good Delivery” standards are the benchmark for gold bars that central banks, major financial institutions, and commodity exchanges accept for settlement and official reserves. These standards specify precise criteria for weight, purity (typically 99.9% or higher), dimensions, and markings, ensuring uniformity and trustworthiness in large-scale gold transactions.
Because the requirements are so exacting, only a select few refiners worldwide—many of them in Switzerland—are certified to produce these bars. This exclusivity not only ensures the quality of gold traded globally but also gives certified refiners a uniquely powerful position in the international bullion market, particularly after the New York Commodities Exchange (Comex) began allowing futures trading in gold and silver in 1974.
Unlike London’s standard 400-troy-ounce bars, the Comex—now the world’s largest gold futures market—opted to trade in one-kilogram bars. These smaller bars were said to be preferred for their flexibility, especially among non-central bank buyers. As a result, all gold arriving in the US from Britain or Asia must first be re-refined in Switzerland to qualify for settlement of Comex contracts.
Despite the disparity, only about 1% of futures contracts result in physical settlement, with most closed out or rolled over before expiry. Earlier this year, the delicate balance between paper and physical gold was tested when a rush of demand from US traders—eager to import gold ahead of tariff deadlines—pulled roughly 2,000 tonnes out of London in just weeks. At that point, the LBMA effectively defaulted on its own clients’ withdrawal requests.
Deliveries that would normally be completed in days were delayed for months, exposing how thin available supply can be when too many holders demand metal at once. Many believe Comex is in an even weaker position than the LBMA when it comes to physical coverage for outstanding contracts.Switzerland sits at the center of this game of gold musical chairs—not just in the West, but in the East as well. Around 70% of the world’s gold passes through its refineries. The trade route is now well established: London to Switzerland, Switzerland to New York—and back again, with substantial volumes also heading to Asia.
The recent US threat would disrupt this flow by adding a massive premium to gold flown into America from Switzerland. On Friday, the US Customs and Border Protection Agency told the Financial Times that one-kilogram and 100-ounce gold bars had been classified under a new import code. This change means imports of these bars from Switzerland will be subject to a 39% tariff.
April 2025
So Switzerland sits at the center of this game of gold musical chairs—not just in the West, but in the East as well. Around 70% of the world’s gold passes through its refineries. At this point the trade route is well-established: London to Switzerland, Switzerland to New York—and back again. With substantial amounts also heading to Asia.
A tariff on Swiss gold would disrupt this flow of gold by adding a massive premium to gold flown into America from Switzerland. On Friday, the US Customs and Border Protection Agency revealed to the Financial Times that one-kilogram and 100-ounce gold bars had been classified under a new import code. This means imports of these bars from Switzerland would be subject to a 39% tariff.
Swiss industry groups warned that without swift clarification, shipments could slow dramatically or even stop entirely, something which would have significant knock on consequences to the bullion market. US gold futures, often relied on by investors to hedge positions, hit an all-time high of just over $3,534 per troy ounce moments after the announcement early on Friday.
The Customs and Border Protection agency said one-kilo and 100-ounce gold bars should be classified under a customs code subject to levies, according to a so-called ruling letter dated July 31, which was seen by the Financial Times. Ruling letters are used by the US to clarify its trade policy. The CBP’s decision stands in sharp contrast with the industry’s previous expectations that these types of gold bars should be classified using a different customs code that is exempt from Trump’s countrywide tariffs.
Given the immediate backlash, Washington was quick to release a statement claiming it would “clarify” so-called misinformation surrounding the potential gold tariffs—even though it was clear the threat originated from Washington itself, now the world’s leading misinformation factory. Swiss politicians and senior figures within the country’s gold refining industry certainly didn’t appear reassured, with their remarks making it clear the move was neither a misunderstanding nor a fabrication. The fact that the Financial Times continued to focus on the story in the days that followed, rather than walk it back, only reinforces the reality that this was no accidental leak or misinterpretation but a deliberate signal.
While the US has framed its barrage of tariffs as an effort to reduce its trade deficit with other nations, that argument doesn’t quite add up—especially in the case of Switzerland, whose economy is relatively minuscule compared to that of the US. In reality, the US imports only a handful of products from the country: pharmaceuticals, gold, and luxury watches. Meanwhile, Switzerland has little need for American goods, given its population of just nine million.
This has left many scratching their heads over why Trump is so aggressively targeting the country—even to the point of threatening to blow up the futures market for gold. Swiss politicians have already begun blaming their own gold refiners for the problem, given that gold accounts for a large part of the trade deficit Trump is using to justify his assault. It has become a mass game of finger-pointing that makes little sense, unless there is more to the narrative than meets the eye.
While the narrative around tariffing gold is on pause for now—given that, just today, Donald Trump tweeted on Truth Social: “Gold will not be tariffed!”—we shouldn’t forget he has flip-flopped on nearly every past tariff multiple times. The important point isn’t necessarily what has been tariffed, but the purpose of the tariffs themselves. The threat of tariffs mainly serves as leverage to gain something important from those the US is extorting.
This time, the target in Switzerland, appears at least in part, to be the top-tier gold refiners that are based there. The tariff threat around gold has helped reveal that. Now this is something worth discussing. Because in the coming reset he who controls the gold, will get to make the rules.
But before we do, it’s worth pausing to reflect on why Switzerland holds such an outsized role in the global gold trade in the first place.