Swiss seize window of opportunity on Trump tariffs
US Treasury Secretary Scott Bessent and China's Vice Premier He Lifeng are meeting in Geneva in an attempt to cool the trade war between the world's two biggest economies.
That has given the Swiss another chance to twist Washington's arm over the global wave of tariffs unleashed by US President Donald Trump on April 2, and comes a day after Britain reached a deal with the United States avoiding the worst of the punitive levies.
Swiss President Karin Keller-Sutter, who is also the country's finance minister, and Economy Minister Guy Parmelin are set to meet Bessent and US Trade Representative Jamieson Greer at a top hotel in Geneva.
Few details have been made public about the talks, but the Swiss were also set to meet Vice Premier He and were due to hold a press conference later on Friday.
Keller-Sutter and Parmelin already met Bessent and Greer in Washington late last month in a bid to negotiate lower tariffs.
Watchmakers on borrowed time?
Given the size of Switzerland's trade surplus -- exporting more to the United States than it imports from it -- the Trump administration has threatened to impose a 31 percent levy on Swiss exports to the United States.
This would be catastrophic for major sectors of Switzerland's economy, such as manufacturing and watchmaking.
For now, Washington is imposing a 10 percent levy on goods coming from Switzerland.
In 2024, the total value of Switzerland's goods exports to the United States was expected to reach 52.65 billion Swiss francs ($63.7 billion), with pharmaceutical products being the largest export.
Imports of goods from the United States were valued at 14.13 billion francs, according to Switzerland's Federal Office for Customs and Border Security.
Switzerland is the sixth-largest foreign investor in the United States, and ranks first in research and development, with pharmaceuticals being a key sector.
The United States is Switzerland's biggest trading partner after the European Union.
Nespresso and big pharma
There may be only so far that Keller-Sutter can get Washington to bend.
US Commerce Secretary Howard Lutnick said Thursday that Washington was likely to impose tariffs of more than 10 percent on trading partners with which it has a trade deficit.
"The 10 percent baseline is for those countries that have (a) balanced budget with us, that are the best," Lutnick told CNBC television. "Those who had trade deficits are going to have a higher tariff."
The potential repercussions of the Trump tariffs on Switzerland are still difficult to quantify.
When publishing its quarterly sales figures, food giant Nestle indicated that its Swiss-made Nespresso coffee pods were likely to be affected.
Pharmaceuticals were not targeted in the tariffs announced in early April -- though the Trump administration has blown hot and cold on such products since then.
Faced with the uncertainties, two Swiss heavyweights in the sector took their own initiative.
Novartis announced in mid-April that it was increasing its investments in the United States by $23 billion over five years, with Roche announcing shortly afterwards that it likewise planned to invest $50 billion over five years.
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