Switzerland’s influential gold industry on Thursday expressed significant reservations regarding a contentious proposal put forth by the head of Swatch, the renowned Swiss watchmaker.
The proposal advocates for the imposition of a levy on Swiss gold exports destined for the United States.
This measure is intended as a retaliatory action in response to the US government’s recent implementation of tariffs on various Swiss goods, according to a Reuters report.
The gold industry’s skepticism stems from concerns about potential negative impacts on its competitiveness and the broader Swiss economy, highlighting a potential trade dispute brewing between the two nations.
Tariffs spark concerns
Last week, in a move that sent ripples of shock across the global economy, US President Donald Trump announced the imposition of a 39% tariff on a range of imported Swiss goods.
This decision has particularly significant implications for Switzerland, an Alpine republic renowned globally as a major refining and transit hub for gold.
The unexpected tariffs threaten to disrupt long-standing trade relationships and could have far-reaching consequences for the intricate network of international commerce in precious metals.
Previously, US Customs and Border Protection had indicated potential tariffs on the most commonly traded gold bullion bars in America.
However, President Trump announced on Monday that gold would be exempt from these tariffs.
According to Swatch CEO Nick Hayek, who spoke with the Swiss newspaper Blick, Trump’s announcement of tariffs on gold would negatively impact the US president.
“Now is the time to go on the offensive. Switzerland should order a 39% export tax on gold bars for the United States,” Hayek told the paper.
That’s where we have to get at him. That’s his Achilles’ heel.
Long-term interests
The Swiss Association of Manufacturers and Traders in Precious Metals (ASFCMP) stated that although proposals for improving bilateral trade balance were appreciated, Switzerland’s long-term interests required careful consideration.
“An export tax on Swiss gold destined for the USA would not only harm Switzerland economically, but also damage the reputation of a country that has consistently promoted and defended free trade,” ASFCMP President Christoph Wild was quoted in the report.
The Swiss Economy Ministry generally welcomed the support of business representatives, emphasising its role in highlighting the strong economic relationship between the US and Switzerland.
Trump defended his 39% tariff by citing Switzerland’s significant trade surplus with the United States, which is partially attributed to gold exports.
According to Hayek, a gold levy would reduce the US trade deficit with Switzerland, even if it didn’t sway Trump.
He told the Blick newspaper:
If Trump doesn’t give in to our pressure, we’ll at least improve the trade balance with the US if the Americans no longer import gold bars via Switzerland.
Talks are ongoing between Switzerland and American officials, with the goal of reducing US tariffs.
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