Swiss Federal President Karin Keller-Sutter admitted late last week that it had not managed to speak to leading officials in Washington DC after US President Donald Trump imposed 31% tariffs on all goods imported from Switzerland last Wednesday.
A baseline 10% global tariff kicked in over the weekend
At a press conference on Thursday, Ms Keller-Sutter said her administration “had not had the opportunity to establish contacts at the highest level yet. But that doesn’t mean it’s not possible; so far, it’s primarily been a matter of time.”
In the mean time, the government is expected to avoid direct countermeasures.
Switzerland and the United States have been exploring a free trade agreement, without success, since the early 2000s, according to the American Swiss Foundation.
Last year, Switzerland had a trade surplus of $38.5 billion in physical goods with the US, but bilateral trade is more balanced when services are taken into account. “The bilateral trade balance is relatively balanced, with the USA showing a surplus in service exports and Switzerland in goods exports,” the Swiss government portal describes.
The federal site adds that Switzerland’s goods export surplus is not due to ‘unfair’ trade practices. “Switzerland abolished all industrial tariffs as of 1 January 2024. This means that 99 per cent of all goods from the USA can be imported into Switzerland duty-free,” it explains.
“Switzerland does not provide market-distorting industrial subsidies. The goods trade surplus is mainly attributable to exports from the chemical and pharmaceutical industry and the gold trade. The USA is the largest recipient of Swiss direct investment,” it adds.
Switzerland’s 31% tariff is more punishing than the 20% imposed on the European Union and 10% hit for UK exporters.
Swiss watchmakers’ CEOs, gathered in Geneva for Watches and Wonders last week, have been almost silent on how they plan to deal with the impact of America’s new tariffs beyond saying that they will be immediately affected by the 10% increase from today but hope to minimise price rises in the USA while they consider their next moves.
Global stock markets have been in turmoil since President Trump’s proclamations last Wednesday. The S&P index of the 500 biggest American companies is down 11%, France’s CAC 40 has dropped 13%.
Over the same period, Richemont, Swatch Group and LVMH shares are down 12.4%, 15.6% and 13.4% respectively.
Watches of Switzerland Group, which generated 45% of its sales in the United States and almost 90% from luxury watches in its latest financial year, has seen its share price fall by 22%.