How Trump’s 2025 Tariffs on Canada & Mexico Impact Gold & Silver

Coin Drama: Libertads vs. Maples

North America’s favorite bullion beauties – Mexican Libertads and Canadian Maples – just became tariff targets. Basic math suggests a $30 silver coin could jump an additional $7.50 overnight. Reality? More complicated than a DC lobbyist’s expense report. Both mints have contingency plays and options:

• Adjusting production processes
• Exploring different distribution channels
• Utilizing existing inventory in U.S. warehouses
• Optimizing their supply chains

For instance, while RCM does mint a lot of their coins in Canada, some production can be done in the United States to mitigate tariffs.

Not Just Coins – Cast Bars Too

Here’s the kicker – 80% of U.S. silver grain used in the bullion market comes from abroad – mostly Mexico. This isn’t just about a few sovereign coins; your favorite cast bars and rounds could get caught in the crossfire as US based dealers and mints work to find alternative raw material providers.

That grain is used by mints in the US to produce thousand of different cast bar products domestically.

Domestic Silver: Why the U.S. Can’t Go It Alone

While headlines focus on international trade shifts, it’s crucial to understand America’s domestic silver landscape. Can American Mines meet our demand?

Alaska leads U.S. production with Hecla Mining’s Greens Creek and Teck Resources’ Red Dog mine combining for over 16 million ounces annually, followed by Nevada’s operations including the Rochester Mine contributing about 6.7 million ounces, and Idaho’s historic Silver Valley adding another 4.5 million ounces through the Lucky Friday and Galena mines.

Yet despite this impressive domestic production, U.S. mines only satisfy about 17% of our national silver demand.

This production gap explains why the new tariffs could have broad market implications. With 63% of U.S. silver consumption relying on imports primarily from Mexico, Canada, Peru, and Chile, and approximately 80% of silver grain used in domestic bullion products coming from international sources, the market will need time to adjust.

The remaining comes from domestic supply, recycling, and secondary markets, highlighting why existing stockpiles and secondary trading will play crucial roles in the months ahead as supply chains adapt to the new trade landscape.

To put these numbers in stark perspective, U.S. mines produce approximately 28 million ounces of silver annually, while domestic demand reaches roughly 162 million ounces. This dramatic shortfall – about 134 million ounces – underscores why international trade plays such a crucial role in America’s silver market.

In 2021, United State American Silver Eagles sold approximately 40 million 1 oz coins just by themselves.

Moves & Counter Moves

Canadian Prime Minister Justin Trudeau said Friday that Canada is ready with a respone if Trump were to move ahead with the tariffs, but he did not give details.

“We’re ready with a response, a purposeful, forceful but reasonable, immediate response,” he said. “It’s not what we want, but if he moves forward, we will also act.”

Such diplomatic language from one of the world’s largest precious metals producers suggests we could see additional market complications as countries adjust their trade policies.

The tariffs’ impact extends far beyond precious metals, with significant implications for Canadian lumber, automotive parts, and oil imports (though oil may see a reduced 10% rate).

From Mexico, the tariffs will affect a broad spectrum of imports including vehicles, automotive parts, and agricultural products – a shift that could influence consumer prices across multiple sectors, from pickup trucks to Super Bowl guacamole, as noted in the AP report.

What This Means for Investors

While the 25% tariff sounds dramatic, the actual market impact will likely be more nuanced. Smart investors should consider:

• Buy existing inventory while available
• Watch for market inefficiencies during the adjustment period
• Monitor for potential opportunities in alternative products
• Keep an eye on secondary market developments

In the bullion industry, tariffs present a unique challenge due to the traditionally razor-thin margins and intensely competitive pricing structure. However, mints and dealers have historically demonstrated remarkable adaptability, and will likely explore various strategies to maintain competitive pricing for their global customer base.

From supply chain restructuring to manufacturing relocations, the industry has multiple tools at its disposal to navigate these new trade waters.

Update Monday February 3rd 10Am

This morning, President Trump released a post stating that tariffs were going to be delayed for Mexico.

President Donald Trump has announced preliminary discussions with Mexican President Claudia Sheinbaum regarding border security and trade tariffs. According to Trump’s social media post, the proposed agreement would involve deploying 10,000 Mexican soldiers along the U.S.-Mexico border to address fentanyl trafficking and immigration concerns.

Of particular interest to bullion investors is the announcement of a one-month pause on anticipated tariffs while negotiations proceed, with high-level discussions to be led by Marco Rubio, Scott Bessent, and Howard Lutnick.

This temporary tariff suspension could have immediate implications for precious metals prices, as trade tensions between the U.S. and Mexico have historically influenced market volatility and safe-haven demand for gold and silver. Market participants should closely monitor these developing negotiations, as any resulting trade agreement could significantly impact cross-border commerce and investment strategies.

CEO of Scottsdale Mint had this to say in response:

Update Monday February 3rd 4Pm

President Trump has paused implementation of tariffs on Canada following their meeting and concessions given by Canada. It will be under a 30 day review.

Scottsdale Mint will have more details about the possible impacts these actions will have in the coming days.