Washington’s surprise move to sweep one‑kilo and 100‑ounce bars into new duties delivers a fresh blow to Switzerland—and tests whether there’s any method to tariff‑driven mayhem.

The global bullion market woke up to a shock this week: the United States signaled that one‑kilogram and 100‑ounce cast gold bars—the workhorse formats of the professional market—may be caught by sweeping, country‑specific import tariffs. A classification ruling from U.S. Customs and Border Protection (CBP) indicated that the bars belong under a tariff‑exposed code, prompting refiners and logistics providers to suspend shipments to the U.S. while they await formal clarification from the White House. Futures prices spiked to fresh records before easing on talk of an executive order clarifying policy. The disruption lands just days after Washington’s 39% tariff on most Swiss goods took effect, turning the world’s premier gold‑refining hub into ground zero for the latest trade shock.

WHAT JUST HAPPENED

In late July, a CBP ruling letter clarified that cast one‑kilogram and 100‑ounce bullion bars should be classified under HTS code 7108.13.5500 rather than 7108.12.10—a technical shift with real‑world consequences because only the latter code was on an exclusion list when the administration mapped out broad, country‑specific tariffs this spring. Because Switzerland is currently subject to a 39% reciprocal tariff rate, market participants inferred that Swiss‑processed bars—along with bars from any other country not explicitly excluded—could face the levy at the U.S. border. Within hours, at least one major Swiss refiner halted U.S. deliveries and several global logistics firms paused flights while lawyers pored over the fine print. Officials in Washington have since said an executive order will clarify the status of bullion and some specialty products. Until that appears in the Federal Register, uncertainty reigns.

WHY SWITZERLAND FEELS THE BLOW FIRST

No country is more central to the physical gold trade than Switzerland. Its handful of industrial‑scale plants dominate the business of turning doré and large bars into exchange‑standard kilobars and 100‑ounce bars used to settle futures. When tariffs threaten those two formats, they effectively target the pipes of global liquidity. The timing compounds the pain: on August 7, a new 39% tariff on a wide range of Swiss exports to the U.S. came into force after Bern failed to secure a last‑minute deal in Washington. Watches, precision instruments and consumer goods are in the firing line; now bullion may be, too—at least on paper—until the White House clarifies otherwise.

MARKET MECHANICS: SPREADS, STOCKS AND FLIGHT PATHS

The tariffs kerfuffle ricocheted through pricing. U.S. gold futures briefly surged to an all‑time intraday high as traders contemplated supply frictions and rushed to hedge. The futures‑versus‑spot spread widened, then narrowed after officials signaled a clarification was coming. One reason the panic didn’t morph into a full‑blown squeeze: inventories in COMEX‑approved warehouses are unusually high relative to open interest after months of precautionary inflows. Even so, physical flows were disrupted. Freight forwarders reported temporary pauses in flights carrying bullion to New York, and some refiners held back shipments pending legal guidance. If tariffs were enforced and sustained, the likely result would be persistently wider arbitrage gaps between New York and London, more metal recast into alternative sizes to fit exemptions, and a re‑routing of flows toward untariffed hubs.

THE METHOD IN THE MADNESS?

Viewed narrowly, slapping tariffs on raw bullion makes little industrial‑policy sense. Gold bars are not a strategic technology, nor are they a mass‑market consumer good that crowds out U.S. factory jobs. But the bullion flap is better read as a by‑product of a larger strategy. The administration has asserted emergency powers to impose ‘reciprocal’ tariffs designed to coerce trading partners into broader bargains: secure supply‑chain commitments, bigger purchases of U.S. energy and defense goods, and pledges to reduce non‑tariff barriers. Seen through that lens, a sweeping tariff architecture—with narrow exclusions and lots of executive discretion—creates leverage. Signals from the White House that clarifications are forthcoming reinforce that tariffs are both cudgel and bargaining chip, adjusted on the fly to reward concessions and punish holdouts.

WHY SWITZERLAND WAS SINGLED OUT

Switzerland’s outsized gold flows loom large in U.S. trade data. In good times, the metal swells the measured goods deficit even though Swiss refiners earn relatively slim margins for processing. That statistical distortion has made Bern a convenient target in the current round of negotiations. The European Union, Japan and South Korea obtained deals that tempered tariff rates after committing to energy purchases and other concessions. Switzerland’s late dash for a reduced, single‑digit rate failed, and the 39% levy kicked in. The bullion confusion arrives as Swiss business groups warn the tariff will hit export‑oriented manufacturers and watchmakers hard, even though gold refining—small in headcount but huge in trade value—is the sector most visible in the numbers.

WINNERS AND LOSERS IF DUTIES STICK

If one‑kilogram and 100‑ounce bars were ultimately swept into the tariff net, the losers would include Swiss refiners, global logistics firms, and U.S. buyers of physical bullion who would face higher costs or delays while supply chains re‑route. London’s over‑the‑counter market might gain relative importance as an intermediary, and alternative refining hubs could pick up market share by recasting bars into exempt formats or shipping via jurisdictions with lower tariff rates. U.S. miners would enjoy little direct benefit—domestic output cannot quickly replace refined imports. Financially, futures‑spot dislocations would create opportunities for well‑capitalized traders but raise hedging costs for jewelers and electronics producers. If, on the other hand, the White House exempts bullion explicitly, the immediate market stress should fade—but the episode will still have raised the cost of doing business by injecting legal risk into routine trade.

WHAT TO WATCH NEXT

First, the text. Markets are waiting for the promised executive order clarifying whether the CBP classification will be carved out from the reciprocal tariff regime. Second, watch the price basis between New York futures and London spot. A persistent premium would signal lingering friction. Third, follow Swiss‑U.S. talks: as with the EU’s deal, tariff relief may hinge on packages that include energy purchases, investment pledges and defense alignment. Finally, keep an eye on substitution effects—more 400‑ounce London Good Delivery bars recast into ‘safer’ formats, or increased use of metal accounts and swaps instead of physical uplift.

BOTTOM LINE

For the bullion market, the episode is another reminder that trade policy has become a live driver of price and liquidity—not just background noise. Whether or not gold bars end up formally exempt, the tariff era’s design feature is uncertainty. That uncertainty is the point: it creates negotiating leverage. There is method in the apparent madness, but it comes at the cost of higher risk premia, wider spreads, and a more brittle global plumbing for the world’s oldest safe‑haven asset.