Swiss Gold Transit Distorts US Trade Surplus, SNB Paper Says
(Bloomberg) — Switzerland’s outsized gold exports to the US shouldn’t be included when analyzing the trade relationship between both economies, according to a paper from the Swiss National Bank.
The study was published by the central bank on Tuesday, less than a week after the White House slapped a 32% tariff on imports from the country. That was much more than the 20% level imposed on the neighboring European Union, and was described as “incomprehensible” by the Swiss government.
“The safe-haven motive of global gold demand distorts key indicators of the Swiss external sector,” wrote Laurence Wicht, an economist at the SNB in Zurich. “Gold-driven shifts in Swiss external sector indicators thus require careful interpretation since they reflect global factors — not changes in Swiss economic fundamentals.”
In the run-up to President Donald Trump’s announcement of global tariffs last week, worries that bullion could be affected prompted a rush of imports into the US. A need for 100-ounce bars there and Switzerland’s importance as a refining hub meant that the country became a stopping point to recast gold shifted from London to New York.
Its sales of the metal across the Atlantic “skyrocketed by a whopping 414 tonnes” between December and February, Wicht said. She pointed to underlying data excluding gold that makes the Swiss trade surplus with the US appear smaller.
“Contrasting the official and smoothed measures suggests that sudden movements in the trade balance should be carefully examined,” Wicht wrote. “At times, these movements reflect specific shifts in the gold-trade balance that are due to independent financial motives — rather than to changes in fundamental economic ties and policies.”
Swiss officials were hoping that their country’s lighter approach to regulation and skepticism toward the EU would spark more sympathetic treatment from Trump. While the economy is likely to suffer, the government has signaled no intention to retaliate for now.
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