Switzerland is reeling from its highest-ever tariffs imposed by the United States, a devastating blow in a trade war between the two nations. The 39% tariff is the fourth-highest globally, behind only Syria, Laos, and Myanmar.
Just weeks ago, Switzerland’s government was confident about striking a deal with Washington, with President Karin Keller-Sutter meeting US Trade Secretary Scott Bessent after a facilitated meeting in Geneva. However, those hopes were shattered when the US unveiled its tariffs, which far exceeded initial predictions of 10% or lower.
The tariff hike is largely due to Switzerland’s significant trade deficit with the US, estimated at $47.4 billion in 2024. The Swiss government had offered several concessions, including reducing its own tariffs on industrial goods to zero and investing billions of dollars in US plants. However, these efforts appear insufficient to address the US concerns.
Switzerland’s economy relies heavily on exports to the US, particularly in pharmaceuticals, gold jewelry, watches, and machine tools. The country’s small population and limited market size make it difficult to compete with the US on price. Many Swiss consumers reject American products, such as gas-guzzling cars, due to their unsuitability for alpine roads.
The US trade deficit has sparked frustration among business leaders, who urge reliable relations with Washington. With a narrow window of opportunity until August 7th, the Swiss government will intensify negotiations in an attempt to reduce or repeal the tariffs. However, experts warn that any concessions may be too little, too late, and thousands of jobs could be lost if the current situation persists.
As Switzerland grapples with this historic defeat, many citizens feel they are being unfairly punished for having a competitive and innovative economy. The country’s resilience in previous economic shocks suggests it will find ways to adapt to this challenge, but the short-term impact is likely to be significant.
Source: https://www.bbc.com/news/articles/c987l633zdgo