Switzerland Grapples with 39% US Tariff as President Departs Washington Empty-Handed

Swiss President's Visit to Washington Fails to Avert High Tariffs

Swiss President Karin Keller-Sutter returned from a last-minute trip to Washington without achieving her goal of reducing the 39% tariff on Swiss exports to the United States. The high tariff, which threatens to impact Switzerland’s export-driven economy, was set to take effect on Thursday. Despite the visit, no deal was reached, and the Swiss delegation left without any formal agreement.

Keller-Sutter described her meeting with U.S. Secretary of State Marco Rubio as “very good” and “friendly.” However, one of the sources familiar with the discussions said she did not meet with U.S. President Donald Trump or his top trade officials. The Swiss president had aimed for a 10% tariff rate, but this was rejected by U.S. officials. The source added that most countries face higher tariffs, and reducing the U.S. trade deficit remains a priority for the administration.

Potential for Increased Trade in Energy and Defense

According to a Swiss source, Washington is interested in increasing energy and defense exports to Switzerland. In return, the Swiss are seeking lower duties on goods such as watches, machinery, and chocolate, which are major exports to the U.S. market.

The 39% tariff was initially announced in April as part of Trump’s broader trade policy, and it was increased last week. The Swiss government has been taken aback by the severity of the proposed rate, which is among the highest since Trump launched his global trade initiatives.

Keller-Sutter and Business Minister Guy Parmelin traveled to Washington on Tuesday for urgent negotiations before the new tariff takes effect. Parmelin had previously suggested the possibility of Switzerland purchasing U.S. liquefied natural gas (LNG) as part of a potential deal. This idea mirrors an agreement between the EU and the U.S., where Brussels committed to buying $750 billion worth of LNG, oil, and nuclear products over three years.

While the EU did not formally pledge to buy more U.S. arms, it indicated that U.S. suppliers would benefit from increased defense spending aligned with NATO commitments under pressure from Trump. These concessions were seen as key to securing the EU deal.

Impact on Swiss Economy and Businesses

Switzerland’s focus remains on improving its offer to the U.S., with no plans for countermeasures against the tariffs. However, some Swiss politicians have criticized the F-35 fighter jet deal, calling for it to be scrapped due to the ongoing trade dispute.

Earlier on Wednesday, Keller-Sutter met with Swiss business leaders, including Roche Chairman Severin Schwan and founders of Partners Group, Alfred Gantner and Marcel Erni. Discussions centered on the tariff situation, though no details were released. Additional meetings with executives from other Swiss companies in the U.S. are planned.

Business associations warn that tens of thousands of jobs could be at risk if the 39% tariffs are implemented. For example, Swiss cheese producers are preparing for a significant drop in sales, as the U.S. accounts for 11% of their cheese exports like Gruyère and Emmentaler.

Concerns Over Economic Fallout

Anthony Margot, a fifth-generation cheese maturer, expressed concerns about the impact of the tariffs. “We can't replace a market like the United States overnight,” he said. The Swiss Market Index fell by 1% in early trading on Wednesday.

In July, Switzerland had agreed on a draft statement with the U.S. that reportedly included a 10% tariff rate. However, Trump’s decision to increase the rate came after what some U.S. officials described as a difficult phone call with Keller-Sutter. While Swiss sources claimed the call was not successful, they denied any falling out between the two leaders.

During her visit, Keller-Sutter did not meet with U.S. Treasury Secretary Scott Bessent, U.S. Trade Representative Jamieson Greer, or Commerce Secretary Howard Lutnick, according to one of the sources.

Ongoing Negotiations and Future Steps

Despite the lack of immediate success, additional talks may still occur even after the higher tariff takes effect. The Swiss government is prepared to continue negotiations, with the country’s cabinet scheduled to meet on Thursday or Friday to assess the next steps.

As the situation unfolds, the Swiss economy remains under pressure, with businesses and political figures closely watching the outcome of these developments.