Switzerland is actively pursuing a tariff agreement with the Trump administration to mitigate the impact of a 39% tariff on Swiss gold imports - the highest rate among developed nations. This tariff, implemented last month, has severely pressured Swiss exports and economic growth expectations.
According to sources familiar with the matter, Switzerland has submitted a proposal to Treasury Secretary Bessent and Trade Representative Greer. The core proposal encourages Swiss gold refining companies to relocate their lowest-margin operations to the United States, including transporting standard 400-ounce London market gold bars to the US for melting and recasting into 1-kilogram bars preferred in the New York market to meet American investor and consumer demand.
The Swiss government has stated it has "optimized its proposal to the US" and hopes this initiative will facilitate rapid agreement and tariff reduction. Trump's sudden announcement of the 39% gold import tariff last month disrupted the traditionally balanced gold trading structure between Switzerland and the US.
In the first quarter of 2025, anticipation of the impending tariff led to massive gold bar exports to the US in arbitrage trading, with gold exports accounting for over two-thirds of Switzerland's trade surplus with America. Trump viewed this shift as the primary source of Switzerland's trade surplus, making it a direct target for tariffs. While the US maintained a $3.6 billion surplus in gold trade with Switzerland in 2024, the first quarter's gold influx completely reversed this situation.
The gold industry holds significant economic and historical importance in Switzerland, primarily concentrated in Ticino. Switzerland serves as the world's largest gold refining center, and despite employing only approximately 1,500 people, it represents a core link in the global gold supply chain. Recent gold price surges reached record highs of $3,800 per ounce this Monday, but refineries earn only a few dollars per ounce during the recasting process, creating extremely thin margins and making the industry exceptionally sensitive to policy changes.
Christoph Wild, Chairman of the Swiss Precious Metals Association, noted that transporting gold from the UK to the US via Switzerland represents market inefficiency. If US domestic refining capacity could be enhanced, this intermediary step could be eliminated entirely. However, he pointed out that such investments are only commercially viable with sufficient domestic US market demand, and low-margin recasting operations would struggle to maintain operations without financial subsidies from Swiss or US governments.
At least one Swiss refinery is reportedly accelerating considerations for US investment, though the overall industry remains cautious. Simone Knobloch, Chief Operating Officer of Switzerland's largest refinery Valcambi, stated that establishing new US refineries lacks commercial logic due to saturated US market refining capacity and excessively low profit margins. Valcambi's current facility in Balerna on the Italian border processes 2,000 tons of precious metals annually, with scale economies making diversified US market investment challenging.
Industry sources indicate that no one would pay even 1% above market price for gold, meaning any Swiss gold export tax would completely collapse the entire trading chain. Despite heated domestic discussions about gold exports, any additional tax burden would directly destroy existing business given thin industry margins and intense international competition.
Currently, Switzerland is considering concessions in the gold refining industry while weighing additional cooperation proposals across energy, agriculture, and other sectors to encourage the Trump administration to reduce tariffs quickly and prevent further trade friction escalation. Diplomatic sources indicate Switzerland hopes these measures will restore trade balance, prevent long-term damage to the gold industry, and stabilize its core position in global supply chains.