Switzerland scrambles to avert Trump’s 39% tariffs as deadline nears

On August 4, Switzerland’s government held emergency talks in a bid to dissuade Donald Trump from imposing punishing 39% tariffs on Swiss exports, with less than three days before the measures are set to take effect.

The proposed rate — the steepest among industrialised nations — is due to come into force on 7 August, Caliber.Az reports via foreign media.

President and finance minister Karin Keller-Sutter convened the Federal Council in Bern to discuss options, as negotiators from the State Secretariat for Economic Affairs sought to revive talks with their US counterparts.

The agency, which had reached a more favourable tentative agreement with Washington a month ago, also briefed business leaders on the situation.

Keller-Sutter, criticised in the Swiss press for failing to anticipate the US move, told Schweiz am Wochenende: “I don’t rule out such a visit, but first, the two sides should come closer together in their positions,” when asked if she would travel to Washington at the last minute.

Thomas Borer, a former Swiss diplomat, said: “It’s unfortunate that the Swiss took so much time” to react, echoing domestic media criticism.

The Trump administration claimed on August 1 that Switzerland had “stolen money” from the US and should be hit with a tariff reflecting its trade deficit — an accusation Keller-Sutter called “absurd.” The US reported a $38 billion trade deficit with Switzerland last year, the 13th largest globally. Swiss exports to the US initially slumped after tariffs were introduced in April but rebounded in June.

It is estimated that the new measure would represent “a tariff shock of around 23 percentage points for the Swiss economy, putting roughly 1% of its GDP at risk over the medium term,” according to economist Jean Dalbard.

One possible bargaining chip could be a Swiss commitment to buy US liquefied natural gas, though the country relies mainly on hydroelectric and nuclear power. Any imports would have to pass through neighbouring states, raising transit costs.

Markets remain cautiously optimistic, with the Swiss SMI index down just 0.43% by late morning. Lombard Odier analysts expect talks to bring the rate closer to the 15% agreed with the EU, but warned they would cut GDP forecasts if the dispute persists.

Franziska Ryser, a Green party MP, said: “On the other hand, we must draw political conclusions from the situation and acknowledge that — at least under the Trump administration — America is no longer a reliable partner.

This means that we should strengthen cooperation with the EU and coordinate more closely with our European partners.”

By Aghakazim Guliyev