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US Adds Surprise Gold Bar Tariff in Blow to Switzerland, FT Says

(Bloomberg) -- The US has put tariffs on imports of one-kilogram gold bars, according to the Financial Times, threatening more turmoil in the global bullion market and dealing a fresh trade blow to the precious metals hub of Switzerland.

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The move, which the FT said was detailed in a July 31 ruling from the US Customs and Border Protection agency, is the latest surprise from US President Donald Trump’s campaign to reshape global trade. Gold futures in New York surged to a record high.

Bullion traders had expected gold bars of one kilogram or 100 ounces to be exempt from Trump’s other tariffs, including the shock 39% country rate he put on Switzerland. But the CBP decision instead placed those items under customs codes that are subject to levies, according to the FT, which cited a letter that laid out the ruling.

Bloomberg News has not seen the letter and couldn’t immediately confirm the details. Traders and analysts are scrambling to understand the situation — whether the tariffs are already in force, if they apply to all countries, or even how they might be avoided.

“Gold is moved back and forth between central banks and reserves around the world,” said Robert Gottlieb, a former precious metals trader and managing director at JPMorgan Chase & Co., referring to the bars. “We never ever thought that it would be hit by a tariff.”

The Trump administration has delivered many shocks as it builds a complex patchwork of different US import tariffs launched for varying reasons at different rates. Last month, US copper futures crashed after the White House unexpectedly spared refined metal — the most widely-traded product — from a 50% levy.

Managers at two major gold refineries in Asia, who did not want to be named discussing sensitive information, are pausing shipments to the US until there is more clarity on the tariffs.

One-kilo gold bars are the most common form traded on Comex, the world’s largest gold futures market, and comprise the bulk of Switzerland’s bullion exports to the US, the FT said. The levy will add to troubles for Swiss President Karin Keller-Sutter after Trump handed Switzerland the highest country tariff among developed nations.

She made an emergency trip to Washington on Thursday aimed at swaying the White House, but came away empty-handed after being denied a meeting with Trump.

Dramatic Change

The latest ruction also adds to a tumultuous year for gold, and drove a spike in the premium of gold futures in New York over international prices on Friday. Contracts for December delivery jumped to a premium of more than $100 an ounce above the global benchmark for spot prices in London, as investors bet on the tariffs snarling imports.

Traders, analysts and executives across the industry were left reeling from the unexpected tariff. Some people believe the “dramatic” change could be an error on the CBP’s part, said David Wilson, a senior commodities strategist at BNP Paribas SA.

Imports and exports for all countries are classified by an intricate system of codes that are used to set the scope of any levies.

The CBP letter, according to the FT, said the gold bars fall under code 7108.13.5500 rather than the non-tariffed 7108.12.10 as expected. That classifies them as a “semi-manufactured” rather than “unwrought” type of gold, according to the US International Trade Commission’s website.

It’s unclear whether other types of gold bars, such as 400-ounce bullion that’s the most-traded in London, will be subject to tariffs. If not, those could simply be shipped to the US and recast into one-kilogram blocks, said a manager of a major refinery who declined to be named as they are not authorized to speak publicly.

--With assistance from Sybilla Gross and Yvonne Yue Li.

(Updates with more details throughout)