Confusion and anger in Switzerland

39%? For Switzerland, this can be a big shock, and worse than the worst-case situation – these are the best tariffs in Europe.

Globally, the fourth highest, behind solely Syria, Laos, and Myanmar, (though if President Trump follows by means of on his 50% tariff risk then Brazil will leap to the highest of the listing).

It is the one story dominating the information and the airwaves on Friday. One newspaper, Blick, described it because the nation’s greatest defeat since French victory within the battle of Marignano in 1515.

Simply weeks in the past, Switzerland’s authorities was exuding confidence.

In Might, a Swiss facilitated assembly between the US and China in Geneva, geared toward stopping a commerce warfare between the 2 financial superpowers, allowed Switzerland’s president Karin Keller-Sutter to seize a gathering with US commerce secretary Scott Bessent.

She got here out smiling. She had been informed, she mentioned, that Switzerland was more likely to be second on the listing after the UK to strike a commerce take care of Washington. 10%, she hinted, was the tempting tariff provide, far decrease than the 31% Donald Trump had unveiled for Switzerland on his ‘liberation day’ in April.

Now, these illusions are shattered. Simply hours earlier than the August first deadline, one final phone name between Ms Keller-Sutter and President Trump yielded nothing. Hours later got here the information that the tariffs wouldn’t be 31% as initially threatened, however a punitive 39%.

Why? Some Swiss politicians are already arguing that Switzerland’s negotiating techniques have been lower than scratch – however some say too robust, others say too obsequious. The fact could also be extra simple: Trump was eager to make large offers, and Switzerland simply is not that large. It isn’t even clear now many discussions the Swiss commerce negotiators have been in a position to have with their US counterparts.

The sticking level, the Swiss authorities says now, is the commerce deficit it has with the US.

Trump sees commerce deficits – when a rustic sells extra to the US than it buys – as inherently an issue for the US, though this can be a view not extensively shared by economists. He believes tariffs may help defend the US manufacturing sector, which for many years has misplaced jobs to corporations abroad.

The Swiss commerce deficit with the US was $47.4 billion in 2024, although if service industries are included, which Trump conveniently ignored, the deficit shrinks to $22 billion. Switzerland sells extra (primarily in prescription drugs, gold jewelry, watches and machine instruments) to the US than it buys.

To attempt to compensate for that, the Swiss authorities decreased its personal tariffs on US industrial good to zero, and a number of Swiss corporations (Nestle, Novartis) promised multibillion greenback investments in US crops. Switzerland is already the world’s sixth largest investor within the US, creating, the Swiss say, 400,000 US jobs.

However balancing the deficit seems to be unimaginable. The inhabitants of Switzerland is simply 9 million, and, bluntly, lots of them do not need to purchase US merchandise. The fuel guzzling automobiles are too large for alpine roads, US cheese and chocolate…effectively, let’s simply say they’re not likely to Swiss style.

Jan Atteslander, head of overseas commerce at EconomieSuisse which represents companies, informed Swiss broadcasting: “We’d like dependable relations with the US.”

This could possibly be a sign of frustration that one among Switzerland’s most necessary export markets has adopted an on/off commerce coverage, stripping Swiss enterprise of the understanding it wants.

So what can Switzerland do now? There’s a small window of alternative, till August seventh, when the tariffs are attributable to come into pressure. Till then, the Swiss authorities will feverishly attempt to negotiate. Swiss companies are warning of hundreds of job losses if the 39% cannot be decreased.

But it surely’s exhausting to see what the wiggle room is.

With the funding guarantees, and the zero tariffs, Switzerland had already supplied every part it might. The one tactic now can be punitive – withdraw the funding provide, introduce reciprocal tariffs, and, the nuclear possibility, cancel Switzerland’s order for US F35 fighter planes.

Throughout Switzerland, there’s confusion – and anger.

Friday is Swiss nationwide day, the equal of July 4th. After giving her conventional speech, Swiss President Karin Keller-Sutter was requested concerning the US tariffs.

She informed reporters the talks with the US went effectively however that for Donald Trump, the commerce deficit was the impediment. The inference was that the US president was the issue.

As an alternative of the standard patriotic celebrations, many Swiss really feel they’re being punished for having one of many world’s best and progressive international locations.

Others say the nation has survived financial shocks earlier than, and can be capable of use that innovation to outlive this one.