Thomas Borer: Switzerland Needs New Tariff Strategy
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Swiss Economy Seen Weathering Trump's Tariff Shock for Now
(Bloomberg) — Switzerland's economy will prove resilient enough to largely shake off the shock of US tariffs over the next year or so, according to a Bloomberg survey of economists. Sunseeking Germans Face Swiss Backlash Over Alpine Holiday Congestion New York Warns of $34 Billion Budget Hole, Biggest Since 2009 Crisis Three Deaths Reported as NYC Legionnaires' Outbreak Spreads A New Stage for the Theater That Gave America Shakespeare in the Park Chicago Schools' Bond Penalty Widens as $734 Million Gap Looms Forecasters have cut their projections for annual growth, adjusted for large sport events, by just 0.1 percentage point for 2025 and 2026. Expansion will be 1.4% and 1.1% for each year respectively, the median of eight respondents shows. The economists do expect weakness in the near term after a growth spurt at the start of the year, driven by export frontloading in anticipation of US President Donald Trump's global levies. They predict growth data on Friday will probably show a small contraction in the second quarter, before a pickup takes hold toward the end of the year. 'We don't see a recession in Switzerland at all,' said Jean Dalbard of Bloomberg Economics. 'The economy is not roaring, but it's still growing.' Switzerland is reeling from the imposition of a 39% tariff, which is the highest in the developed world. While that levy has now taken effect, the country is keeping up efforts to negotiate with the US, raising the prospect that it could yet change. Meanwhile Trump has also threatened to tax pharmaceutical imports, which would be a further shock. 'In Switzerland, severe job losses are all but certain in the coming months, if there is no swift resolution to the US tariff shock,' Bank J Safra Sarasin Ltd Chief Economist Karsten Junius wrote in a note on Friday. 'It is clear that this would make many Swiss manufacturing companies uncompetitive in the US market and drive out production to neighboring EU countries.' If levies were to stay at the high level for a longer period of time, this would also increase the chance of Swiss National Bank policymakers introducing negative interest rates, Junius added, after they cut borrowing costs to zero in June. So far, the expectation prevails that a solution with will be found in a fairly short time, however. In the survey, a majority of forecasters still expect the SNB benchmark to stay at zero through the end of 2027. That's unchanged from before last week's tariff introduction. 'Our base-case assumption is that US tariffs will return to 15% in the foreseeable future — the worst case is that there won't be a deal in the next few weeks but only next year,' said Matteo Mosimann, an economist at UBS Group AG. 'If pharma tariffs are introduced, we would have to reconsider our growth forecasts.' To assess what such would mean for the key Swiss export industry, the government plans to hold talks with top executives of local drug giants Roche Holding AG and Novartis AG. (Updates with UBS economist from eighth paragraph.) The Game Starts at 8. The Robbery Starts at 8:01 The Pizza Oven Startup With a Plan to Own Every Piece of the Pie Digital Nomads Are Transforming Medellín's Housing It's Only a Matter of Time Until Americans Pay for Trump's Tariffs Russia's Secret War and the Plot to Kill a German CEO ©2025 Bloomberg L.P. Sign up for the Yahoo Finance Morning Brief By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Oil prices fall as investors focus on US-Russia talks
Oil (BZ=F, CL=F) Oil prices fell in early European trading on Monday, as investors eyed talks between the US and Russia over the war in Ukraine, which are due to take place on Friday. Brent crude (BZ=F) futures were down 0.8% to $64.99 per barrel at the time of writing, while West Texas Intermediate futures (CL=F) declined 1% to $63.25 a barrel. US president Donald Trump said on Friday that he would meet Russian president Vladimir Putin in Alaska on 15 August to negotiate an end to the war in Ukraine. Read more: FTSE 100 LIVE: Stocks mixed as traders brace for Trump-Putin meet and US-China trade deadline The announcement of the meeting has fuelled expectations of a potential end to sanctions limiting supply of Russian oil to other markets. Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "There are hopes that Trump and Putin's meeting in Alaska later this week will help push the Ukraine conflict to a resolution, which is helping calm concerns over energy supply disruptions. "Threats of extra tariffs on India, which buys Russian crude, pushed up oil prices, but they are in retreat amid expectations the meeting could pave the way for the lifting of sanctions on Russia." "As traders mull the effect on global growing in the tariff era, forecasts for lower energy demand are also acting as a drag on prices," she said. Gold (GC=F) Gold prices dropped on Monday morning, retreating after hitting fresh highs at the end of last week, amid hopes of easing geopolitical tensions. Gold futures (GC=F) slid 2% to $3,418.80 per ounce at the time of writing, while spot gold tumbled 1.1% to $3,359.14. This comes after the precious metal surged to new highs on Friday, following reports of a potential US tariff on 1kg gold bars. However, an official later told Reuters that the White House planned to issue an executive order "clarifying misinformation" about tariffs on gold bars and other speciality products in the near future. Read more: Trending tickers: Nvidia, Tesla, SoftBank, and Bitmine Hargreaves Lansdown's Streeter said that "there is still uncertainty hanging around the market, surrounding concerns about gold bar imports into the US being taxed. This sent the wave of turmoil through the US gold futures market on Friday, pushing prices to record levels." Pound (GBPUSD=X, GBPEUR=X) The pound was little changed against the dollar (GBPUSD=X) on Monday morning, trading at $1.3458 at the time of writing, as investors weighed geopolitical developments and looked ahead to economic data releases. In addition to focus on talks between the US and Russia, the market spotlight is also on Tuesday's deadline for the pause in levies between the US and China, with investors watching to see if the truce on duties is extended. Meanwhile, the US is due to release its latest consumer prices index (CPI) data on Tuesday, followed by the producer prices index (PPI) reading on Thursday. Neil Wilson, UK investor strategist at Saxo Markets, said: "CPI is the big one for the Fed – core inflation is expected to rise 0.3% month-on-month in July, with market participants closely watching Fed policy implications. "Core inflation picked up 0.2% last month, with the annual rate moving to 2.9%. The headline rate was 2.7% having risen from 2.4% since April and is expected to hit 2.8%." "The closer it gets to 3% the harder it is for the Fed," he said. "The Cleveland Fed's Inflation Nowcasting model CPI at 3% in July and August, too hot for the Fed to ease as the markets price." In the UK, employment data is set to be released on Tuesday, followed by economic growth figures on Thursday. Thomas Watts, senior investment analyst at Aberdeen MPS, said: "With the UK labour market having proven remarkably resilient in the face of rising rates and the increase in NIC [national insurance contributions] and minimum wage, the first half of the week will give us the opportunity to check the employment landscape for weaknesses, with both the average hourly earnings index and unemployment claimant count coming out on Tuesday. Read more: Stocks to watch this week: CoreWeave, Cisco, Aviva, Entain and Persimmon "Measuring the change in the number of people claiming unemployment related benefits during the previous month, claimant counts can be particularly useful, the figures are crucial in understanding the strength of the overall market as the figures contribute strongly to the unemployment picture." "Giving us a more comprehensive view of the domestic economy, later in the week the ONS [Office for National Statistics] will also release its monthly gross domestic product data, the broadest gauge of economic health," he added. "With the UK economy having bounced back quicker and stronger than many expected, both those in the City of London and Westminster will hope there are no clouds on the horizon." In other currency moves, the pound was also little changed against the euro (GBPEUR=X), trading at €1.1544 at the time of writing. In broader market movements, FTSE 100 (^FTSE) rose 0.1% on Monday morning to 9,113 points. For more details, on market movements check our live coverage here. Read more: What having children later in life means for your money UK high street footfall suffers as consumers spend on leisure instead Rachel Reeves is under pressure to balance the books. 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Soldiers under bombardment in eastern Ukraine say peace still feels far away
In a Ukrainian dugout, where the constant thunder of Russian weapons sends dirt raining from the ceiling and black plastic lining the walls slips, soldiers express profound scepticism about peace talks. Amid the regular blasts from glide bombs and artillery shells, forcing them underground except to fire their M777 howitzer, the prospect of an end to the conflict feels remote. On the Eastern Front, there is no indication the war will conclude anytime soon. Diplomatic efforts, soldiers believe, are too far removed from the brutal reality of the battlefield to yield results. Their doubt stems from what they perceive as months of unfulfilled US promises to swiftly end the war. Recent suggestions by Donald Trump of "swapping of territories", coupled with media reports implying Ukrainian troops might abandon the Donetsk region – a territory they have defended inch by inch for years – have only deepened the confusion and rejection among the fighting forces. Few believe the current talks can end the war. More likely, they say, is a brief pause in hostilities before Russia resumes the assault with greater force. 'At minimum, the result would be to stop active fighting — that would be the first sign of some kind of settlement,' said soldier Dmytro Loviniukov of the 148th Brigade. 'Right now, that's not happening. And while these talks are taking place, they (the Russians) are only strengthening their positions on the front line.' On one artillery position, talk often turns to home. Many Ukrainian soldiers joined the army in the first days of the full-scale invasion, leaving behind civilian jobs. Some thought they would serve only briefly. Others didn't think about the future at all — because at that moment, it didn't exist. In the years since, many have been killed. Those who survived are in their fourth year of a grueling war, far removed from the civilian lives they once knew. With mobilization faltering and the war dragging on far longer than expected, there is no one to replace them as the Ukrainian army struggles with recruiting new people. The army cannot also demobilize those who serve without risking the collapse of the front. That is why soldiers wait for even the possibility of a pause in hostilities. When direct talks between Russia and Ukraine were held in Istanbul in May, the soldiers from 148th brigade read the news with cautious hope, said a soldier with the call sign Bronson, who once worked as a tattoo artist. Months later, hope has been replaced with dark humor. On the eve of a deadline that U.S. President Donald Trump reportedly gave Russia's Vladimir Putin — one that has since vanished from the agenda amid talk of a meeting in Alaska — the Russian fire roared every minute for hours. Soldiers joked that the shelling was because the deadline was 'running out.' 'We are on our land. We have no way back,' said the commander of the artillery group, Dmytro Loviniukov. 'We stand here because there is no choice. No one else will come here to defend us.' Dozens of kilometers from Zaporizhzhia region, north to the Donetsk area, heavy fighting grinds on toward Pokrovsk — now the epicenter of fighting. Once home to about 60,000 people, the city has been under sustained Russian assault for months. The Russians have formed a pocket around Pokrovsk, though Ukrainian troops still hold the city and street fighting has yet to begin. Reports of Russian saboteurs entering the city started to appear almost daily, but the military says those groups have been neutralized. Ukrainian soldiers of the Spartan brigade push through drills with full intensity, honing their skills for the battlefield in the Pokrovsk area. Everything at the training range, only 45 kilometers (28 miles) from the front, is designed to mirror real combat conditions — even the terrain. A thin strip of forest breaks up the vast fields of blooming sunflowers stretching into the distance until the next tree line appears. One of the soldiers training there is a 35-year-old with the call sign Komrad, who joined the military only recently. He says he has no illusions that the war will end soon. 'My motivation is that there is simply no way back,' he said. 'If you are in the military, you have to fight. If we're here, we need to cover our brothers in arms.' For Serhii Filimonov, commander of the 'Da Vinci Wolves' battalion of the 59th brigade, the war's end is nowhere in sight, and current news doesn't influence the ongoing struggle to find enough resources to equip the unit that is fighting around Pokrovsk. 'We are preparing for a long war. We have no illusions that Russia will stop," he said, speaking at his field command post. "There may be a ceasefire, but there will be no peace.' Filimonov dismisses recent talk of exchanging territory or signing agreements as temporary fixes at best. 'Russia will not abandon its goal of capturing all of Ukraine,' he said. 'They will attack again. The big question is what security guarantees we get — and how we hit pause." A soldier with the call sign Mirche from the 68th brigade said that whenever there is a new round of talks, the hostilities intensify around Pokrovsk — Russia's key priority during this summer's campaign. Whenever peace talks begin, "things on the front get terrifying,' he said.
