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Topics: News, US News, World News
Gerrard Kaonga
Donald Trump’s tariffs could spell disaster for the global gold reserves sat in New York as his latest economic move frustrates long-term allies.
Donald Trump’s tariffs haven’t really been well-received among his trade partners and allies across the globe.
Trump insisted that the tariffs will ultimately benefit the American people and would actually mark the return of American Industry. However, as the US has a long-standing history of trading with allies and other nations across the world, the introduction of new tariffs has frustrated leaders.
Most notably, the US and China are engaged in a fierce trade war with each country taking retaliatory actions against the other.
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The controversial back and fourth with tariffs has also tanked the global stock market.
However, most interestingly, Germany - a country that has long been an ally of the US and is a member of the European Union - is making it clear it's unhappy with Trump's moves.
On the so-called ‘Liberation Day’ (April 2), Trump announced sweeping duties on most global trading partners, including a 20 percent tariff on products from the European Union, while there is already a separate 25 percent tariff for car imports.
This unpredictability from the US has now got Germany considering removing a massive stockpile of gold that it owns.
Germany has the world’s second-largest gold reserves and keeps 37 percent of it, which is about 1,236 metric tons, in the vaults of the New York Federal Reserve. The estimated value of Germany’s Manhattan reserve is €113 billion.
Doing this ensures that should the need ever arise, the central bank of the Federal Republic of Germany, Deutsche Bundesbank, has access to an asset it can turn into cash.
Last week, German newspaper Bild reported that senior figures from the conservative Christian Democratic Union (CDU) party, who are set to lead the next government, have discussed removing the gold due to fears Washington isn’t a reliable partner.
Speaking to Bild, former German government minister Marco Wanderwitz said: “Of course, the question has arisen again.”
In the past Wanderwitz has advocated for a policy that would allow Germany officials to regularly inspect the gold being held in the US as well as withdraw it completely.
Back in 2012 he even attempted to lobby to visit the vaults personally and inspect them but this was ultimately denied.
The idea of being able to inspect the vaults has also been publicly supported by Markus Ferber, a member of the European Parliament for the CDU, who said: “I demand regular checks of Germany’s gold reserves. Official representatives of the Bundesbank must personally count the bars and document their results.”