The good mood between the US and Switzerland is over. At 39 percent, the country is threatened with the highest tariff rate in Europe. This is causing dismay. The US is the country's most important trading partner.
The Swiss government and business associations have reacted with shock to the US tariffs announced against the country. According to US President Donald Trump, imports from the Alpine state to the United States will be subject to tariffs of 39 percent – the highest tariff in Europe and the fifth highest internationally. The amount is significantly higher than expected, said Swiss President Karin Keller-Sutter. Recent negotiations had been aimed at a lower tariff."The Federal Council is disappointed," said Keller-Sutter on the sidelines of an event marking today's Swiss national holiday.
Switzerland is constantly experiencing storms, the politician added. One must stand up, move on, and find solutions."It's a shame that the tariff is significantly higher than what we negotiated." The increased tariffs would have "very negative" effects on the Swiss economy. It is still unclear whether and to what extent the Swiss pharmaceutical industry will be affected by the new tariffs – so far, exceptions have been made for it.
According to Keller-Sutter, the government is already in contact with Washington to find a solution. The new tariffs are currently scheduled to take effect after midnight on August 7. In April, Trump had planned tariffs of 31 percent for Switzerland, which had already met with incomprehension in Bern. The EU has a tariff rate of 15 percent.
USA accuses of"one-sided trade relationship"
The US capital said the reason given was that Switzerland would face a higher tariff of 39 percent on its exports to the US because it refused to make "significant concessions." "Switzerland, one of the richest and highest-income countries in the world, cannot expect the United States to tolerate a one-sided trade relationship," a White House official told Reuters.
Business association sees tens of thousands of jobs at risk
The Association of the Swiss Mechanical, Electrical, and Metal Industries reacted with dismay. Director Stefan Brupbacher said:"We are absolutely stunned." The 39 percent figure has "no realistic, no rational basis." Switzerland is the most economically open country. Brupbacher fears the impact on the labor market if the tariffs come into effect."There will be job cuts at those companies that are simply losing the US market." Tens of thousands of jobs are at risk in the tech industry alone.
The business association Economie Suisse spoke of unjustified tariffs that are"a very serious burden on the Swiss economy." It does not blame the Swiss government for the current situation. Switzerland is the sixth-largest foreign investor in the USA, and Swiss companies have created around 400,000 jobs there. Jan Atteslander, a member of the executive board of Economiesuisse, is now hoping for an agreement that satisfies both sides: Among other things, it concerns"life-saving medicines." These cannot simply be replaced.
The tariffs are endangering Switzerland's industrial base, wrote Swissmechanic, the trade association of small and medium-sized enterprises in the metal, electrical, and mechanical engineering industries. The trade associations are calling on the government to do everything in its power to achieve a reduction in the coming days.
The USA is by far the largest sales market for Swiss companies. Exports last year amounted to CHF 65.3 billion (EUR 70.2 billion), almost 17 percent of total exports. Germany follows with CHF 45.2 billion.
