Could Tariffs Impact Gold And Silver?
Tariffs could influence the gold and silver markets, or they could prove much ado about nothing.
Could Tariffs Impact Gold and Silver?
During the election campaign, incoming President Trump repeatedly threatened to impose tariffs on goods imported into the U.S.
Such actions proved to be a global disaster in 1930 after enactment of the Smoot-Hawley Tariff Act. Then, foreign nations responded with tariffs against imports from America, resulting in extending a depression into the Great Depression.
While some Trump advisors are claiming that such talk is just a tactic to negotiate better trade deals with other nations and not a plan to impose tariffs, governments and people around the world are leery that tariffs could once again cripple the global economy.
Over the past few weeks, gold and silver prices have been quite volatile as fears have risen and waned that there could be tariffs imposed on imports of these two metals.
The possibility of higher tariffs leading to higher consumer prices should terrify people.
However, potential tariffs for these two metals are much less worrisome than what some fearmongers are trying to pretend.
China is the world’s largest gold-mining nation. Its government prohibits any exports of gold. Therefore, there would be no Chinese gold exports to America that could be subject to tariffs.
China is also the world’s second largest silver mining country. With demand for physical gold and silver in China at higher levels than what is produced domestically, I doubt that nation would impose import tariffs on gold or silver.
The US is the world’s fifth-largest gold mining country and the ninth-largest silver miner. It produces about 5 percent of global gold and 4 percent of worldwide silver output. As this production exceeds American gold and silver demand for financial purposes, I doubt that US investors seeking either physical metal would experience much impact if tariffs were imposed on such imports.
In my judgment, the recent volatility over the prospect of tariffs on gold or silver imports into the U.S. is much ado about little or nothing.
Last week’s numismatic trivia question.
Last time, I asked, "Why did ancient Romans sometimes put a silver denarius in milk and other beverage containers?" Even two thousand years ago, people realized silver's antibacterial properties, even though they didn’t understand the science behind them. Putting a silver denarius in unrefrigerated beverages would keep them fresher.
This week’s trivia question
Here is this week’s question. Why are the California Territorial Gold issues that were light on either weight or purity now worth more than other issues that did adhere to strict quality standards? Come back next week for the answer.
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