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Donald Trump will issue an executive order “clarifying” the US’s stance on gold bar tariffs, after a ruling that a widely-traded form of the precious metal is subject to levies sent shockwaves through the bullion market.
“The White House intends to issue an executive order in the near future clarifying misinformation about the tariffing of gold bars and other speciality products,” a White House official said on Friday.
On Thursday, the Customs and Border Protection agency had published a ruling, which was first reported by the Financial Times, saying one-kilo and 100-ounce gold bars should be classified with a customs code that is subject to tariffs. Its decision stood in sharp contrast to a previous White House statement in April that bullion would be exempt from Trump’s levies.
Gold for December delivery dropped by 1 per cent to $3,460 per troy ounce on Friday after the FT reported on the White House’s plan to clarify its tariff. The precious metal had jumped to a record high earlier after the US blindsided the global bullion market by imposing tariffs on imports of one-kilo and 100-ounce bars — a staple in the global precious metals market.
The London Bullion Market Association, which represents large institutional gold traders and banks, said on Friday evening that it was “seeking clarification” from US authorities.
The US Comex is the world’s largest financial market for bullion, but to function efficiently the market relies on having unfettered access to the physical gold market centred on London — which would be threatened by any levies, according to market participants.
Many in the gold industry have questioned whether the CBP ruling, which was written in response to an inquiry from a Swiss refiner, could have been a bureaucratic mistake.
“The US has to decide if the White House was wrong in April, or if the CBP is wrong now,” said one executive.
Switzerland was dealt a particularly heavy blow as a result of the US’s tariffs decision, since the country is the world’s largest refining hub.
The tariff ruling would “negatively impact” the flow of physical gold around the world, noted the Swiss Association of Manufacturers and Traders in Precious Metals Association in a statement on Friday.
Trump reignited his global trade war earlier this week by reimposing his reciprocal tariffs on almost every US trading partner, pushing American import duties to their highest level in decades.
But the US president has also offered a host of exemptions to the levies, including to products such as pharmaceuticals or chips, that the US may apply separate tariffs to in future.
In April, the US issued further exemptions to a range of consumer electronics such as laptops, smartphones and earphones.
Trump has also signalled he may be willing to offer carve-outs for companies such as Apple that promise to make big investments in the US.
But the high volume of executive orders on trade issued by the White House in a short space of time has left many businesses seeking clarification over which products are hit and which are not.
