The Strategic Case for Physical Gold in a Trump Tariff Era

The U.S. tariffs on gold bars under the Trump administration in 2025 have ignited a seismic shift in global gold markets, with Switzerland's refining industry at the epicenter. By imposing a 39% tariff on 1-kg gold bars—reclassified under HS code 7108.13.5500—Washington has disrupted a supply chain that relies heavily on Swiss refiners, who process 70% of the world's gold. This move has not only strained Switzerland's export-dependent refining sector but also exposed the fragility of a global gold market long taken for granted.

Tariffs as a Catalyst for Supply Chain Fragmentation

The reclassification of gold bars from the “unwrought” category (7108.12.10) to “semi-manufactured” (7108.13.5500) has created a pricing chasm between U.S. Comex futures and London spot markets. Spreads have widened by over $100 per ounce, complicating physical settlements and forcing market participants to seek alternative delivery mechanisms. Swiss refiners, already operating on razor-thin margins, now face a 39% cost surge for U.S. exports, which accounted for $61.5 billion in 2024. This has accelerated a shift in sourcing strategies, with buyers exploring non-Swiss suppliers or domestic U.S. gold producers to circumvent tariffs.

The ripple effects extend beyond Switzerland. U.S. gold futures hit a record $3,534.10 per ounce in August 2025, driven by both tariff uncertainty and a surge in safe-haven demand. Analysts at UBS warn that the U.S. may lose its dominance in gold futures trading if deliverable standards shift to non-Swiss gold or alternative hubs like London. This fragmentation risks creating parallel pricing systems, further eroding the U.S. dollar's role as the global benchmark for gold.

Safe-Haven Demand and the De-Dollarization Surge

The Trump-era tariffs have collided with a broader de-dollarization trend, amplifying gold's appeal as a geopolitical hedge. Central banks added 415 tonnes of gold in the first half of 2025 alone, with China, Poland, and Türkiye leading the charge. Gold's share of global reserves has climbed to 20%, while the dollar's share has dipped below 47%. This shift reflects a loss of trust in dollar assets, exacerbated by events like the 2022 Russian reserve seizure and Trump's protectionist policies.

Investors are following suit. Gold-backed ETFs attracted $30 billion in inflows in 2025, reversing 2024 outflows and pushing spot prices past $3,400 per ounce. Retail demand in Asia, particularly India and China, has surged as households seek alternatives to dollar-denominated savings. Meanwhile, the traditional inverse correlation between gold and the U.S. dollar has broken down—both assets have risen simultaneously in 2025, driven by a convergence of geopolitical risk and central bank accumulation.

Strategic Implications for Investors

The confluence of tariff-driven supply chain disruptions and de-dollarization creates a compelling case for tangible gold holdings. Here's how to position your portfolio:

1. Prioritize Physical Gold: With U.S. tariffs increasing the cost of imported bullion, physical gold—especially 1-kg bars—has become a critical hedge. Swiss refiners may reduce output, tightening supply and pushing prices higher.

2. Leverage Gold ETFs: Low-cost ETFs like GLD and IAU offer liquidity and diversification. However, monitor their exposure to U.S. futures markets, which may face volatility due to delivery standard shifts.

3. Diversify with Gold Miners: Companies with U.S. production (e.g., Newmont, Barrick Gold) could benefit from domestic sourcing trends and higher gold prices.

4. Balance with Dollar Assets: While gold thrives in a de-dollarizing world, maintaining exposure to U.S. Treasuries or dollar ETFs can hedge against a potential Fed easing cycle.

Conclusion: A New Era for Gold

The Trump administration's tariffs have not merely disrupted a supply chain—they've catalyzed a structural reordering of global gold markets. As Switzerland's refining industry grapples with tariffs and U.S. buyers seek alternatives, gold's role as a geopolitical and monetary hedge has never been clearer. For investors, the message is straightforward: tangible gold is no longer a niche play but a strategic necessity in an era of trade wars, de-dollarization, and currency instability.

The time to act is now.