04-08-2025
Switzerland could revise offer on Trump tariffs, business minister says
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The country's Cabinet will hold a special meeting on Aug 4 to discuss its next steps.
ZURICH - The Swiss government is open to revising its offer to the United States in response to planned heavy tariffs, Business Minister Guy Parmelin said, as experts warned the 39 per cent import duties announced by President Donald Trump could trigger a recession in Switzerland.
Switzerland was left stunned on Aug 1 after Mr Trump hit the country with
one of the highest tariffs in his global trade reset , with industry associations warning of tens of thousands of jobs being put at risk.
The country's Cabinet will hold a special meeting on Aug 4 to discuss its next steps, with Mr Parmelin telling broadcaster RTS that the government would move quickly before the US tariffs are imposed on Aug 7.
'We need to fully understand what happened, why the US president made this decision. Once we have that on the table, we can decide how to proceed,' he said.
'The timeline is tight, it may be hard to achieve something by the 7th, but we'll do everything we can to show goodwill and revise our offer,' he added.
Mr Parmelin said Mr Trump was focused on the US trade deficit with Switzerland, which stood at 38.5 billion Swiss francs (S$61.7 billion) in 2024, with Switzerland buying US-liquefied natural gas (LNG) among the options under consideration.
Another option could be further investments by Swiss companies in the United States, Switzerland's biggest export market for its pharmaceuticals, watches and machinery.
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'Look at the European Union, they promised to buy LNG. Switzerland imports LNG too – maybe that's one path,' Mr Parmelin said.
'Maybe more investments. But to be sure it's a strong enough basis for continuing talks, we have to fully understand what the US expects.'
Both Mr Parmelin and Swiss President Karin Keller-Sutter were also ready to travel to Washington to pursue talks if necessary, he added.
Swiss officials rejected reports that the higher than expected tariffs were imposed after a bad-tempered telephone call between Ms Keller-Sutter and Mr Trump late on July 31.
'The call was not a success, there was not a good outcome for Switzerland,' a government source told Reuters. 'But there was not a quarrel. Trump made it clear from the very beginning that he had a completely different point of view, that 10 per cent tariffs were not enough.
'We are working hard to find a solution and are in contact with the American side,' the source added. 'We hope we can find a solution before August 7.'
Tariffs would have a huge impact on Switzerland's export-orientated economy and raised the risk of a recession, said Prof Hans Gersbach, an economist at ETH, a university in Zurich.
Swiss economic output would be reduced by 0.3 per cent to 0.6 per cent if the 39 per cent tariff was imposed, a figure which could rise to above 0.7 per cent if pharmaceuticals - which are currently not covered by the US import duties - were included. Prolonged disruptions could shrink Swiss GDP by more 1 per cent, he said.
'There would be a risk of a recession,' he said.
Swiss shares are expected to be hit by the tariffs news when the stock market reopens on Aug 4 after being closed during the Swiss National Day holiday on Aug 1.
The tariffs could also see the Swiss National Bank cut interest rates in September, said Nomura.
'We expect one more 25bp policy rate cut from the SNB in September, which would take the rate to -0.25 per cent,' the bank said.
'A hit to growth from US tariffs on exports would likely weaken economic growth and cause further deflation pressures, adding to the likelihood of easing to a negative policy rate.' REUTERS
