Swiss stunned by US tariff hike, seek negotiated solution
The Swiss government said it would analyse the new situation and decide how to proceed after Trump set a 39% tariff on the export-reliant country - more than double the 15% rate for most European Union imports into the United States.
The levy - up from an originally proposed 31% tariff that Swiss officials had described as "incomprehensible" - is a body blow for the small European nation, which counts the U.S. as the top export market for its watches, jewellery and chocolates.
"I am stunned. These tariffs are based on no rational basis and are arbitrary," said Stefan Brupbacher, director of manufacturers' association Swissmem.
"This decision puts tens of thousands of jobs in the industry at risk."
The Swiss Federal Council said it remained in contact with U.S. authorities about the tariffs and "continues to strive for a negotiated solution".
The new tariff rate is set to take effect on August 7, and a Swiss source familiar with the matter said the two sides would continue negotiating ahead of that deadline.
Swissmechanic, which represents small- and medium-sized companies, said the new rate was excessive and threatened Switzerland's future as a business location.
However, there was some respite for the country's pharmaceuticals sector, which includes industry giants Roche (ROG.S), opens new tab and Novartis (NOVN.S), opens new tab, as they were not included in the 39% rate.
"Swiss authorities understand that the tariffs should not include the pharmaceuticals sector," a spokesperson for the Swiss Federal Department of Economic Affairs told Reuters.
Still, the pharmaceuticals sector is under pressure from Washington to lower prices of drug exports to the United States.
"This is a black day for the Swiss economy," said industry association Interpharma. "It is crucial that Switzerland continues negotiations with the U.S. to reduce general tariffs and prevent specific tariffs on pharmaceutical products."
Trump's announcement differs significantly from a joint draft statement approved by Switzerland's Federal Council on July 4, following intensive talks between both countries, the federal finance ministry told Reuters in a statement, without giving details.
Since then, Swiss officials have been waiting for a sign-off on what was understood to be a preliminary framework for a deal, according to a person familiar with the matter.
Swiss Finance Minister Karin Keller-Sutter and Economy Minister Guy Parmelin had visited Washington for talks to press their case: Switzerland is the seventh-largest investor in the United States.
The Alpine country sent about 65 billion Swiss francs ($80 billion) of goods to the United States last year, or about one-sixth of its total exports of 394 billion francs.
Total trade with the U.S. was 91.9 billion francs, or about 12.7% of all imports and exports, Swiss government data show.
Switzerland's trade surplus with the U.S. last year was almost 38.7 billion francs.
The U.S. is Switzerland's top foreign watch market, accounting for 16.8% of exports, worth 4.4 billion francs, according to Federation of the Swiss Watch Industry.
($1 = 0.8134 Swiss francs)
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