Trump's Import Tariffs Will Distress The London Silver Pricing Rig
Tariffs On Mexican And Canadian Silver Mine Supply Will Move Markets To Draw Further Silver From Already Stretched London Silver Market Vaults
Tariffs on US imports from Canada (25%), Mexico (25%), and China (10%) began February 1, 2025.
In 2024, the US imported 4,200 tonnes (135 million (M)) oz. of silver and using the latest available data from 2020 to 2023, approximately 44% of US silver imports came from Mexico and 17% came from Canada according to the US Geological Survey.
The 82M oz. imported annually from Canada and Mexico is now incentivized to be sourced from other cheaper sources.
As 70% of silver mine production is a minor byproduct of the mining of other primary metals, mine supply of silver from other countries simply cannot respond quickly to added silver demand irrespective of the price of silver.
Silver vault stockpiles in London and Switzerland are thus going to see growing demand for added silver delivery to the US market to make up in-part for the tariff penalized silver supply from Mexican and Canadian miners.
As noted over the last several months, London’s vaulted silver stockpiles are already at a critical level where very little of the silver in London vaults is available for delivery to provide liquidity to the physical silver market.
With an estimated 4 billion (B) to 6B oz. of only fractionally-backed silver promissory notes for immediate silver delivery issued into the London cash/spot silver market, some market participants will begin to default if reallocation of added silver delivery demand to London continues over time.
The Bank of England that coordinates the multi-decade London price rigging of silver and gold in London is going to have a very rough time in the weeks and months ahead.
Blackrock Inc. that operates the world’s largest silver Exchange Traded Fund (ETF) in the ‘SLV’ iShares Silver Trust also merits close observation.
Figure 1 - Donald Trump Receives Gold Bullion Building Lease Payment - Sept. 15, 2011; photo source: Associated Press
Best regards,
David Jensen
Admire how you’re being a bloodhound on this topic, David. Thank you.👍
Get me some popcorn!