Editor’s Note
This article examines the strategic shift by Swiss gold refiners to circumvent U.S. tariffs by investing in American operations, a move that has ignited political debate in Switzerland over export taxes and industry risks.
Switzerland has proposed investing in U.S. gold refining businesses to pressure President Donald Trump to rescind a 39% tariff on gold imports.
Swiss refiners plan to shift low-margin work, such as melting London Good Delivery bars, to producing the preferred 1-kilogram bars in New York.
Politicians like Lisa Mazzone and Nick Hayek are calling for new taxes on gold exports amid criticism of the industry’s risks.
According to Bloomberg, Switzerland has proposed investing heavily in U.S. gold refining plants to pressure U.S. President Donald Trump to rescind the 39% import tariff he imposed on its products last month.
This tax, among the highest for a developed nation, is already reducing Swiss exports and lowering economic growth prospects. After Swiss President Karin Keller-Sutter failed to counter President Trump’s tax policies, officials are changing strategy. They are offering incentives across various sectors, from energy and agriculture to now, gold.
The proposal, presented to U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, involves relocating Switzerland’s least profitable refining work to the United States. This means moving the process of melting large bars traded in London into the smaller bars preferred in New York to the U.S. This work earns refiners only a few dollars per bar, even when gold prices are high, exceeding $3,800 per ounce. The Swiss government, without disclosing specifics, stated it had “optimized its proposal to the U.S. to reach a swift agreement.” It added that negotiations would continue to lower the new tariffs as soon as possible.
This entire situation began when Trump’s tariff threats presented an opportunity for gold traders. Traders quickly flooded the U.S. with gold before the official measures were announced. This short-term strategy became problematic because, in the first quarter alone, more than two-thirds of Switzerland’s trade surplus with the U.S. came from gold. The canton of Ticino, home to the world’s largest gold refineries, became the epicenter. As Swiss refineries operated non-stop to melt and recast gold, the trade surplus surged. This trade imbalance has sparked fierce backlash across the Swiss political spectrum.
Nick Hayek, CEO of the Swatch Group, and Green Party President Lisa Mazzone have both argued for taxing gold exports. Hayek even suggested that after President Trump indicated U.S.-origin gold imports would be exempt from tariffs, Switzerland should impose a 39% tariff on bars exported to the U.S. Mazzone argued that the gold refining industry severely damages the country’s image and does not contribute enough economically.
Mazzone’s concerns trace back. During World War II, Swiss banks accepted gold looted by the Nazis. In 1968, three of these banks established the Zurich Gold Pool, refining massive amounts of gold, including apartheid-era gold from South Africa, making Switzerland the dominant player in the gold bar market.
Professor Marc Pieth, who wrote the book ‘Gold Laundering,’ detailed this opaque past. Since then, industry ownership has changed, but the low margins remain. Even with gold prices at record highs, refiners earn only a few dollars per bar.
Christoph Wild, President of the Swiss Association of Precious Metals Producers and Traders, pointed out that expanding refining facilities in the U.S. could address the issue, but only if there is sufficient local demand. He stated, “All our association members have medium to long-term investment plans for the U.S.,” but added, “We cannot be sure if the business can be run economically without subsidies from the Swiss or U.S. governments.”
A source familiar with the negotiations confirmed that at least one Swiss refinery is already rushing to invest in the U.S. Meanwhile, some warn that imposing taxes on or forcing the relocation of the gold industry could destroy it.
Simon Nobs, COO of Valcambi SA, says the profitability doesn’t add up. The company, which refines up to 2,000 tons of metal annually in Balerna, right next to Italy, has no operations in the U.S. and no construction plans. Nobs said, “From a business viability perspective, entering the U.S. doesn’t make sense.” The U.S. market is already saturated, and margins are too low to justify expansion. However, with Trump back in the White House and pressure mounting on Swiss politicians, the gold industry may no longer have the luxury of choosing what is rational.