Swiss Tariff Deal Push Hits Roadblock in Heated Trump Call

Mint

a day ago

Switzerland's 11th-hour phone call with Donald Trump offered the nation a harsh reality check: A trade deal isn't a deal unless the US president personally closes it.
At 8 p.m. Swiss time on Thursday — 2 p.m. in Washington — President Karin Keller-Sutter spoke with her American counterpart and discovered the two leaders had vastly different views on the fairness of their bilateral trade relationship.
The clock added urgency, with just 10 hours to go before Trump's higher taxes on imports were set to take effect Friday for many economies without an agreement.
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Rather than considering a broader picture that included services, foreign investment, and Swiss cooperation offers — which Trump had previously been open to, according to a Swiss official on the call — he zeroed in on Switzerland's merchandise trade surplus.
For Trump, a goods trade imbalance of nearly $40 billion is akin to stealing from the US and he wanted the Swiss to increase its offer, the person said.
When Keller-Sutter didn't offer anything that would see the trade balance change, Trump was so angry that the 39% rate he imposed on the Swiss hours later was chosen more or less at random, according to a person familiar with the matter.
Keller-Sutter was quoted as saying the notion was 'absurd' that Switzerland had in essence stolen money from the US and should therefore be hit with a tariff rate commensurate with the trade deficit.
The Swiss state secretariat for economic affairs, which negotiates on tariff and trade matters, 'has already made initial contacts' with their US counterparts for further discussions, Keller-Sutter said Friday. It's not clear what, if any, response has been from the US government.
Asked if she'd be willing to make a last-minute trip to Washington before Aug. 7 when the new tariffs are due to kick in, Keller-Sutter said, 'I don't rule out such a visit, but first, the two sides should come closer together in their positions,' according to Swiss newspaper Schweiz am Wochenende.
That rate, if it stands, would put Switzerland at a big disadvantage to European Union member states, which negotiated a preliminary deal with Trump for a tariff on EU goods of 15% while pledging investments in the US economy and purchases of the country's exports.
Trump's focus on the goods imbalance caught the Swiss by surprise as negotiators from both sides had more than a month before hammered out the framework of a deal, which the Swiss government then endorsed on July 4.
Both Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer had agreed to the draft, according to two people familiar with the matter, so the Swiss believed a final nod from the Trump administration would be more of a formality.
The White House press office didn't immediately respond to a request for comment.
Speaking on condition of anonymity, a White House official portrayed the outcome of the call as the Swiss refusing to make meaningful concessions on trade barriers. A country that is very wealthy wasn't going to get an agreement without major concessions, the person said.
Crucially, the draft included exemptions from US tariffs for Switzerland's important drugmakers, Bloomberg has reported.
On Friday, after Trump's executive order laying out his global tariff rates set the effective date at Aug. 7, Greer indicated that the levies are designed to incentivize manufacturers like pharmaceutical companies to produce in the US.
'We weren't able to reach agreement on the best way to reduce that trade deficit at all,' he told Bloomberg Television. 'They ship enormous amounts of pharmaceuticals to our country. We want to be making pharmaceuticals in our country.'
Saying that Swiss-US negotiators had prepared a deal that was ready to be signed is 'an overstatement,' Greer said.
'The reality is: All of the countries, you trade back and forth paperwork and then you take it back to your leaders to get guidance from them,' he said. 'And so nothing is agreed until everything is agreed — that's what every trade negotiator knows.'
The Swiss government declined to comment on the phone conversation.
Still, in his Bloomberg TV interview, Greer said that new talks before that date are 'not my focus.'
If countries call for negotiations, 'I am always going to talk to these folks, and if they have proposals I'll talk to them and I will speak to the president,' he said. 'We are focused on implementation and doing what's right to change the trading system to one that benefits American workers.'
With assistance from Annmarie Hordern, Lisa Abramowicz, Dani Burger and Hugo Miller.