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Fashion Network
28 minutes ago
- Fashion Network
Switzerland's US tariff blow threatens its go-it-alone approach
The two-minute video isn't subtle. Wielding a medieval halberd, the president of the conservative Swiss People's Party lays out the choice Switzerland faces: a simpler life that the country's founders spelled out in a one-page declaration more than 700 years ago or a 2,000 page treaty with the European Union. It's a choice between 'freedom and serfdom,' Marcel Dettling says before tossing the treaty documents onto a bonfire. The trouble for Dettling and Switzerland's other EU naysayers is that the alternative vision of a nimble nation trading freely with the rest of the world isn't looking so good anymore. On the day the video was released — Aug. 1, Switzerland's national day — the White House delivered a bombshell by announcing the country would face tariffs of 39% on all exports to the US, among the highest anywhere in the world. President Karin Keller-Sutter is traveling to Washington on Tuesday as she and her colleagues race to get Donald Trump to reconsider. They don't have much time, with the levies due to kick in on Thursday. Helene Budliger-Artieda, one of the chief negotiators for Switzerland, held a phone call with business representatives on Monday. She told them that Switzerland's main goal is to get the overall tariff number down, but didn't reveal any potential concessions it might make, according to people briefed on the call. Budliger also received a clear message from businesses: there's no substitute for the US market. While the Swiss try to figure out how to deal with Trump and the US, the episode has cast a new light on the country's relationship with the EU. That's long been a divisive issue, with arguments about trade and economic benefits clashing with concern about immigration and sovereignty. For the pro-EU voices, the chaotic back and forth with the US will give them fresh reason to push the benefits of ties with the bloc, particularly as it secured a far better 15% rate. 'This will undoubtedly strengthen the camp of those who argue that Switzerland needs to move closer to the EU,' said Rene Schwok, a professor of political science at the University of Geneva. 'Their argument is that the EU is a much more reliable partner than the US and China.' Keller-Sutter and her officials had expressed confidence right up until late last week that they'd secured a far better deal with the US. But it all fell apart at the end during a phone call with Trump. Critics say she didn't have anything to offer and came unprepared to the negotiation table. The US president sees his country's 39 billion dollar trade deficit with Switzerland as tantamount to theft, and didn't appreciate being told otherwise by Keller-Sutter. 'I don't believe that the US is a reliable partner under this presidency,' Andri Silberschmidt, a Liberal lawmaker and member of Keller-Sutter's party, told Bloomberg. 'As a small nation, we are dependent on reliable partners who abide by agreements.' Switzerland is in the midst of a separate debate on an agreement with the EU that it hammered out late last year and is due to go to a national vote. In a survey – conducted before Trump's self-declared Liberation Day announcement on tariffs — 47% of Swiss respondents were in favour, while 35% were against it. To be sure, Switzerland's low unemployment, low inflation economy is robust enough that it could withstand the 39% tariff hit. If pharmaceutical exports were included at the unchanged rate, this would translate to a hit of at least 0.7-percentage point hit to the economy, according to Hans Gersbach at KOF economic research institute in Zurich. If drug exports were excluded, the hit would be between 0.3 and 0.6 percentage points. That would be a harsh blow but not enough to tip the economy into recession. Still, that would jeopardise 'tens of thousands of jobs' in key manufacturing industries, said Stefan Brupbacher, director of trade group Swissmem. However Keller-Sutter's last-minute bid in Washington works out, the lesson for Switzerland is that it needs to realise it's not in the same league as the US, China or the EU but a small player. This may push the Swiss to reconsider the advantages of 'splendid isolation,' Kirkegaard said. 'When the elephants are dancing, the mice get trampled and that's a little bit of what's happened here.'
Euronews
8 hours ago
- Euronews
Why is Slovenia the only EU country to ban arms trade with Israel?
In the absence of a consensus at European level, Slovenia is going it alone. On Thursday, it became the first EU country to ban all arms trade with Israel, including transit and imports. In a press release, the Slovenian government explicitly outlined its concerns about the humanitarian situation in Gaza and denounced the EU's inability to adopt such a measure because of "internal disagreements." The decision is above all symbolic, since the Slovenian government says it has not issued any arms export permits to Israel since October 2023 because of the conflict. This decision is intended to intensify the pressure on the Israeli state to put an end to the war in Gaza. "All measures are on the table, we support, as we have done in the past, the suspension of the accession agreement with Israel, as well as trade sanctions and an arms embargo, sanctions against certain settlers, certain ministers and the Israeli government that supports violence", declared Tanja Fajon, Slovenia's Minister of Foreign Affairs, on 15 July in Brussels. "All measures must be taken as soon as possible, until there is a ceasefire, until the violence has stopped, until we have a resolution between the two countries", she added. Falling sales Other European countries such as Belgium, Italy and the Netherlands have not gone as far as Slovenia, but have reduced arms sales to Israel. Belgium officially banned arms exports to Israel following the 2008-2009 Gaza war. In the Netherlands, the Court of Appeal in The Hague annulled the export of F-35 spare parts to Israel in February 2024. The 2013 Arms Trade Treaty prohibits states from transferring weapons that will be used to commit genocide or crimes against humanity. In 2008, EU countries also undertook to refuse transfers of technology and military equipment that could be used to prolong armed conflicts. "For European states, there is an obligation not only not to export equipment that could be used to commit crimes in Gaza, but also not to export equipment that could be used to maintain the land, air or naval dimensions of the Israeli occupation of the Palestinian territories," Samuel Longuet, a researcher at the Groupe de recherche et d'information sur la paix et la sécurité (GRIP), told Euronews. "So this covers virtually all the military equipment that could be used by the Israeli army." Continued exports Meanwhile, European exports of military equipment to Israel continue. Some countries state that the parts are only assembled in Israel or that they are used as training equipment, and not in Gaza. "The work of several human rights associations in Italy, as well as the Italian investigative press, revealed that the Italian government had just suspended the granting of new export licences, but everything that had been authorised before 7 October 2023 was still going to Israel. In particular parts for training aircraft," explains Longuet. The transfer of dual-use technologies, which can be used for both civilian and military purposes, also poses a problem. In Belgium, the Flemish region allowed a local company to export "screens that ended up in the control cabins of Israeli drones that were used to bomb a humanitarian convoy a few months ago," the researcher said. "The argument put forward by the Flemish government at the time, before 7 October, in March 2023, was that this was a generic technology, a screen that could be found, yes, in a drone control cabin, but also in anything else. And so in this case, it didn't require the company supplying these screens to apply for an export licence, since it wasn't strictly speaking a military technology", he points out. The United States is by far the leading supplier of weapons to Israel. It accounts for two-thirds of Israeli arms imports, with Germany and Italy coming in second and third places. Germany mainly sells frigates and torpedoes, according to the Stockholm International Peace Research Institute. "What we export is a little bit of everything in fact. Parts that can be used on Israeli ships, so equipment that will be used in naval systems. We also supply parts for training aircraft," says Longuet. "The UK and Italy, for example, export parts for the Italian M-346 aircraft used to train future Israeli fighter pilots," he explains. At the European level, an arms embargo is unlikely to succeed. It would have to be approved unanimously by the EU Council. However, Longuet says countries such as Germany, Hungary and the Czech Republic, staunch supporters of Israel, would likely block it.
Euronews
8 hours ago
- Euronews
Trump warns EU: 35% tariffs if $600bn investment pledge unfulfilled
A controversial investment pledge forming part of the EU-US trade deal will need to be honoured by the EU or 35% blanket tariffs will be applied to the bloc, US President Donald Trump has warned. On Tuesday President Trump was quizzed on the deal he agreed by handshake with Commission President Ursula von der Leyen in Scotland on 27 July on CNBC's 'Squawk Box' via phone. He touted the US position - which a White House fact sheet stated - that the agreement included a pledge for the EU to invest $600 billion in the US by the end of his second term. "This new investment is in addition to the over $100 billion (that) EU companies already invest in the United States every year," the fact sheet stated following the deal. The European Commission is unable to design and implement investments on behalf of the private sector. The $600 billion has been described by the Commission as an indication based on the executive's contacts with industry. "It's not something the EU, as a public authority, can guarantee – it's something based on the intention of private companies," a senior official said last week. Asked on Squawk Box what teeth there were in the investment pledge element of the deal, Trump said, if it didn't happen, 'then they pay tariffs of 35%'. Trump said that the investment pledge was one of the reasons he had dropped tariffs to a blanket 15% rate, so if it is unfulfilled then higher tariffs will click back in. The EU has been approached for comment. The Commission on Tuesday suspended a package of trade countermeasures targeting €93 billions' worth of American goods which was scheduled to take effect on 7 August, as it continues to negotiate a joint statement formalising the agreement struck by von der Leyen and Trump in Scotland.
