All that’s gold does not glitter

Daily update

The Financial Times reports that the US has declared imports of one kilogram and 100 ounce bars of gold are subject to trade taxes. If true, US citizens who tried to hedge the inflation impact of US President Trump’s trade taxes by buying gold bars must pay those same taxes on their hedge. The ruling suggests gold imported between 9 April and 7 August was subject to tariff, underscoring how tariffs work. Gold importers are liable, and they (not exporters) will be pursued in the courts if they do not pay the tax. Holders of gold futures, etc. would not be subject to trade taxes.
Switzerland is the main supplier of these gold bars. Gold exports from Australia and the UK to the US are now likely to be favored (tariffs being lower on those countries’ exports).
Trump nominated the chair of the council of economic advisers, Miran, as a Federal Reserve governor (until January). Miran might consider whether recent gold price moves challenge their view that Trump’s trade taxes are not substantially inflationary. Miran is not likely to be confirmed before the September policy meeting.
UK Bank of England Chief Economist Pill is scheduled to speak in the wake of a divided decision to cut interest rates.