Introduction
The shockingly high tariffs imposed by the Trump administration in the United States, known as "39%," have been targeted. Why was it targeted? And why are there voices of anger in Switzerland claiming "the gold industry is to blame!"?
By reading this article,This goes beyond mere trade issues; it explores how changes in the global economic structure and events in seemingly distant countries affect our lives (prices and asset values).You can gain a deeper understanding of it.
High US tariffs hit Swiss gold trade hard! A battle over trade deficit shakes refining facilities.
Switzerland, currently the world's largest gold refining center, is facing a fundamental overturning of its business model due to the United States' aggressive trade policies.
What's happening?
The U.S. government has decided to impose extremely high tariffs of up to 391 TP3T on imports from Switzerland in order to reduce its trade deficit (a situation where imports exceed exports). Surprisingly, this includes gold bullion (high-purity gold ingots).
Although Switzerland does not have any gold mines, it plays a role as a "hub" for refining gold collected from all over the world and sending it back out into the world. This "movement of gold passing through Switzerland" appeared to the United States as a factor contributing to its "trade surplus with the U.S." (a situation where Switzerland is earning too much from the U.S.).
Why is the gold industry being treated as the "culprit"? The debate over responsibility and the complex trade structure unfolding in Switzerland.
This tariff issue is not simply a dispute between countries. In Switzerland, there is fierce debate among politicians and citizens alike, with many arguing that the gold industry caused the situation.
1. The background of the "responsibility debate" within Switzerland
Following the failure of negotiations between the Swiss government and the United States to lower tariffs, calls for the gold industry to bear a greater "burden" are growing stronger for the following reasons:
- The magnitude of the economic impact: Gold is Switzerland's largest export item, accounting for 271 TP3T, and its revenue is enormous, exceeding $100 billion (approximately 14.7 trillion yen).
- Proposals from politicians: Some argue that if the industry is harming the national economy, the losses incurred due to tariffs should be compensated for by the gold industry's profits, and others propose a "sustainability tax."
2. The overly complex "gold triangle trade"
To understand why Switzerland is so important, you need to understand the global flow of gold (the triangular cycle).
- London-New York-Switzerland Circulation: Gold typically travels between the London and New York markets. During this time, it undergoes "re-minting" (re-shaping of size and form) in Switzerland.
- Switzerland's role: Because the gold needs to be remade to fit the different gold sizes used in each market, a route through Switzerland is essential.
- Current abnormal situation: The tariffs have increased US inventories, leading to a reverse flow of gold to London, and even "inefficient movements" such as sending boxes of gold back and re-minting them.
3. Industry counterarguments and future prospects
Gold refiners are strongly protesting, saying they are simply meeting market demand and are being unfairly singled out.
- The value of specialized skills: Switzerland is the base for this business because of its advanced technology and strict regulations, which are a source of pride for the country.
- Investing within the United States: As a solution, efforts are underway to expand refining operations within the United States (such as in Oklahoma) to meet American needs.
[Things you should know] The impact of this issue on "our work and lives"
You might think, "What does the Swiss gold market have to do with me?" However, this development will indirectly change our economic environment.
Impact on luxury brand goods (watches)
One of the main customers of Swiss gold refiners is a world-class luxury watch manufacturer. If US tariffs raise the price of Swiss products, demand in the US will decrease, ultimately damaging Swiss manufacturing as a whole.
Impact on asset values and inflation
Gold is known as a "safe-haven asset." If trade tensions escalate and the cost of trading gold (tariffs) rises, the price of gold in the market will fluctuate. This could indirectly affect not only investors but also our savings and purchasing power through inflation and currency values.
Summary: In a world where boundaries are blurring, what will we rely on?
The turmoil surrounding the Swiss gold industry vividly illustrates the contradictions of "division" and "interdependence" inherent in modern society.
The United States' logic of trying to reduce its own trade deficit. In contrast, Switzerland's pride in supporting the global economy with its advanced technology and distribution system. And caught in the middle, private companies being forced to shoulder the burden of national losses. These are not events happening in distant countries.
National borders were once seen as "walls to be protected." But today, in a globalized economy, a tariff in one place can shut down a factory on the other side of the world, alter the price of a luxury watch thousands of kilometers away, and shake the value of our assets. Boundaries are no longer physical; they are merging and blending together through digital numbers and complex supply chains.
What we should learn from this chaos is the danger of searching for a single correct answer. Both America's "America First" policy and Switzerland's "trust in technology" are true in their own right. However, when they clash, the first to suffer are the people on the ground who support the system.
In this rapidly changing era, what we need in our work and business is not just the ability to look at the numbers in front of us, but the ability to imagine the vast "connections" behind them. How does a single tariff move the world? The ability to decipher that chain is the strongest "shield" for surviving in unpredictable times.
