Photo by The Swiss president heads to the U.S. in a bid to make a better counteroffer to Trump’s 39% tariff. An angry Trump allegedly set the new rate “randomly” after a heated 20-minute phone call. He accused the Swiss president of failing to offer anything to balance the $40B trade deficit between the U.S. and Switzerland.
Keller-Sutter said Trump’s notion that Switzerland was “stealing” from the U.S. was “absurd.” She said the decision to hit her country with a tariff rate that was “commensurate with the trade deficit” was unfair. Keller-Sutter said the Swiss State Secretariat for Economic Affairs had already contacted its U.S. counterparts for more negotiations.
However, the U.S. government had not made any official response. The only clear thing was that Trump wanted Switzerland to increase its offer.
The Swiss government stated that it was entering the next phase of negotiations, ready to take U.S. concerns into account. However, it stressed that it was not considering any countermeasures, although it did not disclose details about its offer. The 39% tariffs are estimated to impact nearly 60% of Swiss exports to the U.S., its largest market. That will supposedly leave few options for Swiss watches, chocolate, and machinery.
Hans Gerbach, an economist at the ETH University in Zurich, also estimates the tariffs to reduce Switzerland’s GDP by between 0.3% and 0.6%. If the “untouched” pharmaceutical sector is included, the effect could reduce the GDP by over 0.7%, with possibilities of up to 1% reduction in the long-term.
Keller-Sutter says Trump is focused on trade deficits
The Swiss President claimed that Trump was more focused on trade deficits because he saw it as an economic loss for his country. Official data revealed that Switzerland had a trade surplus of about 38.5 million CHF (~€41.2B) with the U.S. in 2024.
Trump accused the Swiss of a trade deficit of roughly $1.2 trillion (~€1.04B), putting it on Trump’s radar in his quest to reduce trade deficits with U.S. trading partners.
However, the decision angered Switzerland, which saw it as “discrimination.” The Swiss government’s concern was that other U.S. trading partners with surpluses, like the EU, South Korea, and Japan, were able to negotiate tariffs down to 15%. The official figures revealed that South Korea had a trade surplus of $56 billion (~€49B) compared to $235 billion (~€204B) for the EU, and $70 billion (~€61B) for Japan.
“We had no indication even in the last hours before the call of the president that it could end in this manner, and above all, no indication that we would be hit with such a punishment.”
–Guy Permelin, Swiss Economic Minister
The Swiss government was shocked into a frenzied weekend of emergency discussions after the 20-minute phone call between Trump and Keller-Sutter went off the rails. However, it disclosed that it was preparing to cushion the country’s economy “in the event of” unavoidable, temporary tariff-related job losses.
Parmelin says sweet deal is ‘difficult to achieve’
The Economic Minister said coming up with a sweet deal by Wednesday (August 6) to appease Trump is “difficult to achieve.” However, he noted that countries that had secured better deals with the U.S. had offered to increase U.S. investments and buy more U.S. energy products.
Parmelin said the Swiss had so far held “good negotiations” with Commerce Secretary Howard Lutnick, U.S. Trade Representative Jamieson Greer, and other White House officials.
Parmelin disclosed that the Swiss government was also aiming for a 10% to 15% tariff rate. However, U.S. officials asserted that Trump had the final say, making things even more difficult for Switzerland. Trump singled out Switzerland for the high tariffs because he claimed the U.S. ran “a big deficit” with the Swiss in 2024.
Washington justified its decision by accusing Switzerland of “meaningless concessions” on removing trade barriers. The U.S. was against the “one-sided” relationship between the two countries. However, Swiss officials and economists were surprised by that perception owing to the country’s deep trade relations.
