United States and Switzerland, global gold-refining hub, have upended bullion trade after Washington reclassified one-kilogram and 100-ounce bars under a tariff-liable customs code, exposing a core format for New York delivery to duties amid a wider 39% levy on Swiss imports. Futures in New York spiked to a record as traders scrambled to assess supply and legal exposure; Switzerland shipped about $61.5 billion of gold to the US in the 12 months to June, of which roughly $24 billion could now incur tariffs.
What changed and why it matters
A July 31 Customs and Border Protection ruling letter steered kilo and 100-oz bars to HTSUS 7108.13.5500 rather than an expected duty-free line, reversing market assumptions that these delivery units would be exempt. Those two sizes are the formats accepted for COMEX delivery—either one 100-oz bar or three 1-kg bars per contract—so the decision hits the plumbing linking London’s 400-oz market with New York via recasting at Swiss refineries. Some Swiss plants have paused or reduced shipments while lawyers parse the ruling. “Another blow” to trade flows, said Christoph Wild of the Swiss precious-metals association.
Market impact and pricing
The tariff headlines widened the spread between COMEX futures and spot as shorts rushed to secure warrantable bars, with December futures printing an all-time high near $3,534/oz. If sustained, duties on delivery-grade bars could lift US premiums versus London and Asia, reroute supply chains toward non-Swiss recasters, or force greater use of financial settlement rather than physical delivery into New York. Gold is up ~27% year-to-date on inflation concerns, sovereign-debt jitters and a softer dollar; tariff uncertainty adds a logistics premium on top.
Flow rerouting and operational frictions
Switzerland refines a dominant share of global gold and is a primary source of COMEX-grade kilo bars. With Swiss exports subject to a 39% US tariff under the administration’s “reciprocal” regime—and with kilo/100-oz bars now explicitly tariffable via the CBP reclassification—US dealers may pivot to bars cast in Asia or recast 400-oz “good delivery” bars outside Switzerland, adding time and cost. Any recasting inside the US avoids cross-border duties but faces capacity and brand-mark constraints for COMEX eligibility. Near-term, participants expect more Exchange-for-Physical friction between London and New York.
Policy backdrop and legal questions
The bar reclassification lands days after the White House affirmed steep “reciprocal” tariffs on multiple partners, including Switzerland at 39%. The CBP move also intersects with a long-running thicket of tariff classifications for minted bullion versus semi-manufactured products; the industry is seeking clarity on whether specific forms (e.g., coins, cast versus minted bars, or 400-oz London bars) fall outside the scope. Until guidance arrives, traders will assume the strictest interpretation—and price it in.
Company Background and Market Context
Switzerland’s refining cluster—Valcambi, PAMP, Argor-Heraeus and Metalor—sits at the center of global flows, often recasting London-standard 400-oz bars into US-deliverable 100-oz or kilo units. The US futures market (COMEX) specifies delivery in either a single 100-oz bar or three 1-kg bars, with brands and assays vetted by the exchange. That specification concentrates New York’s dependence on a few high-throughput plants, which is why a tariff on exactly those sizes creates an outsized shock. Swiss officials have called emergency meetings after failing to win a carve-out in Washington.
Gold underpins central-bank reserves, jewelry and investment demand. Prices set fresh records on tariff news, while the structural bid from central-bank buying and macro hedging remains intact. The key watch-items now are whether CBP refines the ruling scope, how quickly trade reroutes non-Swiss supply, and whether COMEX premiums normalize once inventories adjust.
