Switzerland is preparing to present an improved offer to former US President Donald Trump after being hit with steep 39% tariffs—one of the highest among global economies—which rattled Swiss financial markets and triggered emergency consultations.
The new US tariffs are set to take effect from Thursday, June 7, and place Switzerland as the fourth most-affected country, behind Brazil (50%), Syria (41%), and Myanmar and Laos (40%).
Markets in Switzerland responded sharply, with the Swiss stock index plunging over 2% at opening on Monday, before recovering slightly and closing the day with a 0.15% dip. The tariffs apply broadly to Swiss exports and mark a significant escalation in Trump’s protectionist trade agenda.
Swiss President Responds to US Criticism
Swiss President Karin Keller-Sutter confirmed that Trump believes Switzerland unfairly benefits from a 40 billion Swiss franc ($50 billion) trade surplus with the United States. Trump had initially threatened a 31% tariff in April, prompting Switzerland to open talks with Washington.
Now, after the unexpected tariff hike, Switzerland has signalled readiness to go further. In a statement following an emergency Federal Council meeting, Bern said it “will continue negotiations beyond the Thursday deadline,” seeking a deal to reduce tensions and tariffs.
“Switzerland enters this new phase ready to present a more attractive offer, taking US concerns into account,” the Federal Council said, noting that Switzerland is at a disadvantage compared to other economies with similar profiles.
Economic Concerns and Industry Reactions
Economists warned that the tariffs could drag Swiss GDP growth by 0.3–0.6% annually. If the US extends the duties to include the pharmaceutical sector, which is currently exempt, the damage could deepen.
Investment firm Vontobel expressed cautious optimism, suggesting the possibility of lowering the tariff to around 15%—in line with what other nations have received—through continued negotiations.
Meanwhile, industry groups voiced frustration. Chocosuisse, representing the Swiss chocolate industry, called the decision a “severe blow” for a sector already burdened by a 10% duty.
“It is particularly shocking that Switzerland finds itself at a distinct disadvantage compared to all other Western industrialised countries,” the group stated.
Global Trade Tensions Escalate
Trump’s move to impose tariffs on a wide range of countries—including 25% duties on Indian goods—has sparked widespread concerns about trade instability. Critics argue the aggressive tariff policy risks weakening America’s global influence and could even lead to a recession.
Legal challenges are also underway. A US appeals court recently heard arguments questioning whether Trump exceeded his constitutional powers by declaring a national emergency to justify the tariffs.
However, US Trade Representative Jamieson Greer warned that no major changes are expected in the near term.
“The coming days are unlikely to bring any revisions to current tariff rates. They’re pretty much locked in,” Greer said.
As trade tensions rise, Switzerland’s push for a diplomatic resolution underscores the broader challenge smaller economies face in navigating Trump’s unpredictable economic policies.
