Swiss seeks path to bypass US tariff clampdown

Swiss Government Seeks to Prevent 39‑Percent US Tariff On Its Goods

Following a surprise announcement last Thursday that the United States intends to impose a 39‑percent tariff on nearly 70 countries, Swiss officials have publicly warned that a similar duty could be levied on Swiss exports. The new rate, set to take effect on August 7, would be especially harmful to Switzerland’s manufacturing and watchmaking sectors.

Negotiations in Progress

In a statement posted on X, the Swiss Federal Council said its government remains in contact with US authorities and “still hopes to find a negotiated solution.” The Council expressed regret over the United States’ unilateral plan to burden Swiss imports with substantial duties, noting that progress had been made in bilateral talks and that Switzerland’s stance had been very constructive.

Senior Swiss officials have held numerous discussions with their US counterparts in an attempt to reach a deal with the administration of President Donald Trump, mirroring what Britain and the European Union have done. President Karin Keller‑Sutter, who also serves as finance minister, spoke on Thursday with Trump. She noted that the trade deficit remains the centerpiece of Trump’s preoccupation and that a framework trade deal could not be reached.

Impact on Swiss Exports

• France – The United States is a key trading partner for Switzerland, taking 18.6 percent of its total exports last year, according to Swiss customs data.
• Pharmaceuticals – Pharmaceuticals dominated at 60 percent of Swiss goods exports to the United States, followed by machinery and metalworking at 20 percent and watches at eight percent.
• Tariff Exemption – Economist Adrian Prettejohn at Capital Economics said the surprisingly high tariff rate of 39 percent is likely to be negotiated down in the future and, importantly, pharmaceutical goods still appear to be exempt for the time being.
• GDP Effect – Prettejohn estimated that the 39‑percent tariff rate would knock around 0.6 percent off Swiss GDP. The impact would be considerably more if pharmaceuticals lose their tariff exemption.

US Trade Deficit and Swiss Investment

The trade balance between Switzerland and the United States is heavily in Switzerland’s favour, at 40 billion Swiss francs ($49 billion) last year. Trump has paid particular attention to trade deficits, viewing them as a sign that the United States is being taken advantage of by its trading partners. Switzerland is, however, the sixth country in terms of foreign direct investment into the United States, particularly in research and development.

Small‑and‑Medium‑Enterprise Call for Action

The trade association representing small and medium‑sized firms in Switzerland’s machine and metal‑working industry urged the government to take advantage of the negotiating window before the entry into force on August 7 of the new tariffs, warning that they would have serious long‑term consequences.