US Adds Surprise Gold Bar Tariff in Blow to Switzerland | Hacker News Reader

US Adds Surprise Gold Bar Tariff in Blow to Switzerland

bloomberg.com

41 pointspetethomas19 comments

Specifics of only putting tariffs on 1kg bars and not other sizes seems utterly pointless. The article itself points out that people will just ship different sized bars to the US instead and re-cast them on arrival.

It doesn't actually say what the new tariff rate will be, so the decision on whether to procure different sized bars / cast before shipping, and whether to recast in the US or just store / sell different sized bars in the US will ultimately just be a decision on whether all of that is cheaper than the new tariff. My guess is that at any significant volume, it'll be cheaper to recast.

Does sufficient capacity for recasting actually exist in the US or would it need to be built? If the latter, how long will it take to build it?

I suspect it doesn't exist yet. In fact, the majority of the US trade deficit with Switzerland is attributable to a very recent spike in gold imports. And my understanding is that in turn is a triangular arbitrage trade where physical gold has higher prices in the US, so 400-ounce bars of gold were getting exported from London to Switzerland to be recast, and then to the US.

This was never going to be a durable trade, since the arbitrage only existed due to an expectation of future tariffs on Gold. It probably also was a major contributor Switzerland having just been slapped by extremely punitive tariffs on actually productive sectors of the economy. Good riddance.

All Swiss 1 kg gold bars will suddenly become laser-cut 500 g bars.

It also might be malicious compliance by executive underlinings to soften the surprise.

Wouldn't that be more like 499.5 grams?

Can't laser cut them anyway, you'd lose the assay stamp. Melting & reforming is the way to do this.

What about shaving off a gram or two with a file? You know I'd personally volunteer to help them do that to avoid the tariffs.

Shave off 1±0.2 μg and sell 0.999999999 kg bars instead. :D

Works for the engine size limits. Aren't all 2litre engines actually 1950cc?

Probably. It saves them money on material. As long as they don't quote $.002/MiB as .002¢/MiB. https://youtu.be/nUpZg-Ua5ao

I was being facetious.

Or maybe 2 kg bars ?

But this is a rather big surprise to me. With the price of gold, I doubt only the very rich can afford these. Aren't those the people who Trump is trying to enrich. Or maybe the rich do not buy gold, or has another source.

I thinking mainly countries, criminals, and specialized artisans and industrial manufacturers take physical delivery of large quantities of gold.

I'm sure there are always some usual requests to insist on physical delivery of gold in the case of options. Example: https://www.ibkrguides.com/kb/en-us/phys-delivery-comex-meta...

Perhaps instead we should create aqua regia and dissolve copious amounts of gold, Fields Medals, and Nobel Prizes to be smuggled as, say, industrial waste. /s ;)

> Bullion traders had expected gold bars of one kilogram or 100 ounces to be exempt

Reads to me as all gold bars getting tariff'd.

> Specifics of only putting tariffs on 1kg bars and not other sizes seems utterly pointless.

So in other words, it matches the other damaging and/or stupid import taxes the federal government is imposing on Americans right now? :P

Perhaps the ulterior motive is to damage consumer gold markets in order to promote somebody's cryptocurrency?

It's amazing. It's great trade policy, probably the greatest ever.

Imo Donald Trump’s actions are easier to understand after watching Goldfinger

(Same goes for Putin and From Russia With Love)

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