GENEVA (AP) — After weeks of working with U.S. officials to try to avoid hefty tariffs on Swiss goods, negotiators from Switzerland got assurances that a deal was all but done. Swiss businesses vowed to pour tens of billions in investment in the United States in the coming years.
Still, President Donald Trump said no to any special deal. Now a scramble is underway ahead of Thursday, the deadline for when the whopping 39% tariff on Swiss products announced last week goes into effect.
Switzerland’s President Karin Keller-Sutter and other top officials traveled to Washington on Tuesday to try to convince Trump that the measure — among the highest from the Trump administration — was too much and could cut profits for famed Swiss industries like chocolates and watchmaking.
The new rate is over 2 1/2 times higher than the one on European Union goods exported to the U.S. and nearly four times higher than on British exports to the U.S. — raising questions about Switzerland’s ability to compete with the 27-member bloc that it neighbors.
Under the U.S. announcements from last Friday, the export duties imposed on Swiss companies will now only be surpassed by those on firms from Laos, Myanmar and Syria, which are facing 40-41% rates.
A cautionary tale
Switzerland’s case is a lesson in do’s and don’ts of doing business with Trump. The thinking goes, if a rich country with economic might that excels in technology, pharmaceuticals and finance can’t convince the U.S. president to scale back the high tariffs, who can?
Trump himself seems to be focused on a single, high number: Switzerland’s trade surplus in goods with the U.S.
In an interview with CNBC on Tuesday, Trump alluded to a recent call he had with Keller-Sutter, saying “the woman was nice, but she didn’t want to listen” and that he had told her: “We have a $41 billion deficit with you, Madame.”
It was not immediately clear where that $41 billion figure came from. According to the U.S. Census Bureau, the U.S. ran a $38.3 billion trade imbalance on goods last year with Switzerland. That figure excludes exports of services.
Keller-Sutter, who also serves as Switzerland’s finance minister, has faced criticism in Swiss media over the last-ditch call with Trump before a U.S. deadline on tariffs expired Aug. 1, which some say appeared to make things worse.
A surprise move
The 39% rate is even higher than the 31% on Swiss goods announced on Trump’s “Liberation Day” in early April — before the Swiss started negotiating with U.S. officials. The new figure took many Swiss business leaders by surprise.
“It’s hard to negotiate when you’re dealing with someone as unpredictable as Donald Trump,” said Ivan Slatkine, head of the Federation of Romandie Enterprises, which groups companies in the French-speaking part of Switzerland.
“We had a (Swiss) government that gave the impression the deal was done, it only awaited a signature from the president,” Slatkine told The Associated Press over the phone. “We have the impression that we were punished, but we don’t know why.”
The United States is Switzerland’s second-biggest trading partner after the EU, which nearly surrounds the Alpine country of more than 9 million.
The Swiss government said Tuesday’s trip was meant to “facilitate meetings with the U.S. authorities at short notice and hold talks with a view to improving the tariff situation for Switzerland.”
Swiss officials have argued that American goods face virtually zero tariffs in Switzerland, and the Swiss government says the wealthy Alpine country is the sixth-biggest foreign investor in the U.S. and the leading investor in research and development.
Switzerland’s powerful pharmaceutical industry — which promised tens of billions of investments in the U.S. in recent months amid the tariff worries — is exempt from the 39% rate.
But Slatkine said the steep tariff level could be aimed to send Switzerland’s Big Pharma — epitomized by Roche and Novartis — a message that it too could come under pressure.
The Swiss stand
The trip comes a day after Switzerland’s executive branch, the Federal Council, held an extraordinary meeting and said it was “keen to pursue talks with the United States on the tariff situation,” according to a government statement.
After consulting with Swiss businesses, the council said it had developed “new approaches for its discussions” with U.S. officials and was looking ahead to continued negotiations.
“Switzerland enters this new phase ready to present a more attractive offer, taking U.S. concerns into account and seeking to ease the current tariff situation,” the council said.
According to figures published by the Swiss Embassy in Washington, the U.S. has been Switzerland’s most important goods export market since 2021, while Switzerland is the fourth most important export market for U.S. services — not goods.
The bilateral trade volume in goods and services between Switzerland and the U.S. reached a total of $185.9 billion in 2023, the embassy says on its website.
