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BLOG — Mar 18, 2025 Gold rush: The story behind January's US trade data By Patrick Newport, Ph.D. Imports of goods into the US soared in January by a record amount. At first glance, the explanation appeared obvious: Companies front-loaded imports to avoid impending tariffs. A deeper dive, however, shows little front-loading. The underlying story is one about gold, polypeptide protein and glycoprotein hormones, and computers. Gold In December, goods imports rose by $11.3 billion. About 80% of this increase was in the category “finished metal shapes,” which includes gold bars. February saw an unprecedented import surge of $36.2 billion, with finished metal shapes contributing $20.5 billion, or 57% of the total. In 2024, finished metal shapes constituted a tiny fraction of total goods imports, 1.6%. “Finished metal shapes” is an end-use category under the Census Bureau’s system of classifying imports and exports. The Harmonized System (HS) of classification identifies a product, and gold bars are a component of HS commodity 7115. HS 7115 shot up by $20.1 billion in January. By mining the data, we determined that 97% of the additional gold bars in HS 7115 arrived via air freight — 99% of it through the New York City Port District — and the vast majority ended up in vaults in New York. Why were gold bars moving from Switzerland to New York? Switzerland is the world’s premier gold refining hub. It transforms raw gold into standardized high-purity bars — sometimes just resizing them. Brick-sized gold bars in London weigh 400 troy ounces; to be traded in New York, they must be recast into smartphone-sized bars weighing 1,000 grams. Approximately 386 short tons of gold bars were flown to New York from across the world in January because gold commanded a higher price in New York than in London and other places. Why was the price higher in New York than in London? Normally, the spot prices in these two places differ modestly, reflecting the costs of shipping, storing and financing. The possibility that gold bars will be tariffed created a disparity between what a bar of gold is worth in New York today and in the future, increasing demand in New York — raising its price. New York’s higher spot price then acted as a magnet pulling in gold bars from across the globe, mainly from Zurich. Transferring gold from Zurich to New York should not change GDP, which measures current production. Our analysis indicates that the Bureau of Economic Analysis will treat January’s gold shipments the same way it treats nonmonetary gold imports, ignoring them. Some analysts take a different view, penciling in a first-quarter decline in real GDP, with net exports slashing more than 3 percentage points from growth. Outside of gold bars, imports in January still sizzled. Nominal consumer imports increased by $6.0 billion, or over 8%, while capital goods jumped $4.6 billion, or more than 5%. Was front-loading the story here? That is hard to say. Polypeptides protein and glycoprotein hormones Pharmaceutical preparations (end-use 40100) grew by $5.2 billion, or 87% of the increase in consumer goods imports. By mining the data, we discovered that HS 293719 — polypeptide protein and glycoprotein hormones and derivatives — was the subgroup behind the increase in pharmaceutical preparations, soaring by $7.9 billion. Nearly the entire increase, $7.8 billion, originated from Ireland. Likewise, nearly the entire increase, $7.7 billion, listed Indiana as the destination state. Why Ireland? Ireland has become a hub for producing pharmaceutical products. Why Indiana? Indiana is home to one of the world’s largest pharmaceutical companies. Were pharmaceutical companies front-loading imports to escape an initial round of tariffs? The data does not specify. Outside of pharmaceuticals, the data showed few signs of front-loading consumer goods imports. Computers and peripherals Was the surge in computers and peripherals related to tariffs? That is hard to determine because breakthroughs in AI have led to a surge in high-tech hardware investments. For example, in December, nominal imports of computers and computer peripherals stood 57% higher than 12 months earlier. It is not clear how much of January’s surge in computers and peripherals imports was related to impeding tariffs and how much would have occurred without the tariffs. One thing is clear: Outside of computers and peripherals, one sees little evidence of tariff avoidance in capital goods imports. Overall, there was not much tariff avoidance in January. February and March will be different. Click here to get our report, Economic Dynamics 2025: 10 Key Trends and Forecasts This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global. Power plays Key economic, geopolitical and supply chain drivers for 2025 Request Full Report From neighborhood to nation we have you covered Regional Explorer: Economics, risk, and data analytics Learn More