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Switzerland’s exports of gold — particularly during times of global stress — should not count towards its bilateral trade balances with the US and therefore be excluded from tariff considerations, according to a paper published by the Swiss National Bank on Tuesday.
While gold is Switzerland’s largest import and export in terms of value, the safe-haven motive of buying the metal during times of uncertainty “could distort the nation’s external sector indicators like the current account,” the SNB study said.
The study comes less than a week after the White House slapped a 32% tariff on imports from Switzerland — a global hub for gold trade. The tariff was much higher than the 20% level imposed on the neighboring European Union, and was described as “incomprehensible” by the Swiss government.
“Gold-driven shifts in Swiss external sector indicators thus require careful interpretation since they reflect global factors — not changes in Swiss economic fundamentals,” said Laurence Wicht, an economist at the SNB in Zurich and author of the paper.
For instance, the covid pandemic saw Switzerland export a total of 516 tonnes of gold to the US in 2020 — a sharp contrast to previous years, in which Swiss gold exports were negligible.
This time, in the run-up to US President Donald Trump’s announcement of global tariffs, traders also rushed to ship more bullion into America in anticipation of gold being affected. Between December and February alone, Swiss gold sales across the Atlantic are estimated at 414 tonnes.
If gold were to be excluded, then underlying data shows that Switzerland’s trade surplus with the US would appear smaller, according to Wicht.
“Contrasting the official and smoothed measures suggests that sudden movements in the trade balance should be carefully examined,” he continued.
“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.”
Last year, gold accounted for 27% of Switzerland’s goods trade value — more than any other product.
