Just like any other country, Switzerland is trying by all means to make things work in terms of tariff adjustment or reduction. Strong economies colliding through tariffs, taxes, and legal terms rather than by war or rhetoric have repercussions that extend well beyond the conference rooms. Reputations, relationships, exports, and jobs might all be at risk. One such instance is subtly developing as a small but significant European nation navigates a contentious trade issue. This country is entering a high-stakes scenario with a significant international actor and is better known for its diplomacy and neutrality.
Switzerland promises to continue communication after the strict new U.S. tariffs
Switzerland will continue talks with the United States, its president said on Thursday, after President Donald Trump placed crippling import tariffs on Swiss goods, which threaten to inflict serious damage on its export-focused economy. The 39% import levy, among the highest applied under Trump’s global trade reset, took effect at midnight Washington time (0400 GMT) after an 11th-hour effort by Swiss officials failed to produce a better deal.
The tariffs are set to throttle the small alpine nation’s access to the U.S., a leading export market for Swatch UHR.S, Rolex, and Patek Philippe watches, as well as high-end cheeses and chocolates. The U.S. is also the single largest market for Swiss pharmaceuticals, worth $35 billion last year, produced by companies including Roche ROG.S and Novartis NOVN.S, though those exports are not currently covered under the 39% rate.
After the U.S. rejects a tariff compromise, Swiss leaders call for more talks
President Karin Keller-Sutter told reporters following an urgent meeting of the seven-member Federal Council – Switzerland’s governing cabinet,
“For the affected sectors, companies, and their employees, this is an extraordinarily difficult situation.”
Keller-Sutter left Washington on Wednesday without a deal following a hastily organised trip during which she did not meet with Trump or any of his leading trade representatives, according to two sources. Her proposal for a 10% tariff rate was rejected by U.S. officials, one of the sources added. Swiss lawmaker Damien Cottier, chairman of the Swiss-U.S. parliamentary association,
“We have seen in other cases that President Trump’s positions can evolve. We must continue to negotiate and argue our case, which is a good one.”
This conflict affects both nations and their main sectors and economies
The new levies’ effects will extend beyond the diplomatic community. If the problem isn’t fixed right away, businesses, employees, and supply lines on both sides are likely to be disrupted. The stakes are particularly high for Switzerland, whose economy is mostly dependent on exports. Industries that employ thousands of people and are essential to the Swiss economy and identity, such as watchmaking, pharmaceuticals, and more.
Despite its small size, Switzerland is a major player in international markets. Many people choose it as a partner because of its dedication to high-quality manufacturing and financial transparency. However, even trustworthy parties like Switzerland may become embroiled in conflicts fuelled by broader geopolitical forces when international economic policies change. Right now, Canada may exit DC talks over Trump tariffs.
U.S. importers started paying new tariff rates on Thursday, imposed on dozens of nations that have not reached agreements with Washington. Trump’s decision last week to impose the exorbitant tariff, which is significantly higher than those negotiated by the European Union, Britain, Japan, and South Korea, shocked Switzerland. Blick, a daily newspaper, featured the banner title “39%” on its front page on Thursday, which was all black. Switzerland and everyone else are just in an uncomfortable place, that Trump’s tariffs head to a critical U.S. appeals court test because of all these changes.
GCN.com/Reuters