Sources: Swiss gold refining plans add sparkle to Trump's trade deal
Two people with knowledge of the situation say that Switzerland wants to build a gold refinery or increase its processing capacity in the United States as part a plan to lower U.S. tariffs. Donald Trump imposed 39% tariffs on Swiss imports as a result of the U.S.-Swiss trade deficit on August 7, 2018. Switzerland had scrapped its industrial tariffs in January.
The main reason for the goods trade deficit with Switzerland is due to Swiss exports, including gold and chemicals. Since the new tariffs were introduced, the Swiss government has been working with the private sector to reduce them.
The Swiss are a leading refiner of gold. As part of a plan to even out the trade flow, the gold industry will increase its refining capacities in the U.S., according to people familiar with the discussions who spoke on condition of anonymity because the subject is sensitive.
The sources stated that this meant investing in a refinery in the U.S. or building extra capacity.
The Swiss Economy Ministry stated that confidential discussions with the United States are ongoing at different levels. It did not comment on these talks.
Christoph Wild, the president of Swiss precious-metals association ASFCMP declined to comment if a refinery will be built. He said that as long as the gold industry was contributing to the deficit, it would be necessary to find ways to stop this.
He said, "This could be done by meeting U.S. demands from within the United States." Guy Parmelin, the Swiss Economy Minister, held "constructive" discussions with Trump's economic officials last Friday. Sources said that the gold plan was already in place and negotiations are still ongoing between the two nations.
PHARMA EYES OUR PRODUCTION
The Swiss have been preparing a proposal to Trump that includes both additional investments in the United States and spending on U.S. products.
Sources said that to reduce the deficit in the pharmaceutical sector, Swiss companies should meet the entire demand of the United States with products manufactured in the United States.
Sources added that it could include enough additional production to allow Swiss pharmaceutical firms to export to the U.S. Switzerland hopes that its pharmaceutical companies will be exempted of any tariffs that may result from a separate, so-called U.S. They said that the Section 232 investigation would look into whether U.S. dependence on foreign drug production could threaten national security.
Interpharma, the Swiss pharmaceutical industry's association, argued that if services are included in the U.S. goods deficit then there is no real U.S. shortfall and that attempting to eliminate this shortage at the expense pharma companies will harm Switzerland's economic growth.
The report noted that there was a tendency to cater for large markets through more local production. It said that while increasing the capacity of the U.S. would relieve pressure on Switzerland it could also damage its status as a pharmaceutical hub. Bern will also increase its procurement of U.S.-made military equipment and allow the United States more access to liquefied gas via and into Switzerland.
People said that the plan would involve Swiss companies booking more energy deals through Switzerland rather than London to help balance the trade. (Reporting and editing by Dave Graham)
(source: Reuters)
