President Trump’s imposition of tariffs has reverberated globally, prompting governments to seek avenues for negotiation. Some, like the UK, secured early concessions with a 10% tariff rate, while the European Union followed with a 15% agreement.
While these rates exceed pre-existing levels, they remain lower than initial projections.
Switzerland, however, faces a substantial 39% tariff and has yet to achieve a breakthrough with the US administration. As a non-EU member, Switzerland cannot leverage the accord negotiated by Brussels.
Despite consistently ranking as one of the world’s most competitive and innovative economies, and being a significant investor in the US, with Swiss businesses reportedly supporting 400,000 jobs, the US strategy is met with dismay and confusion.
“Thirty-nine percent tariffs: I was just shocked,” states Jan Atteslander, director of international relations for the Swiss business federation Economiesuisse.
“This is unjustified; there’s no clear rationale for such a high rate.”
Since the tariffs were announced on August 1, the Swiss government has been actively engaged in seeking renegotiation with Washington, but without success. The US president, it appears, has shifted focus to other priorities.
Approximately 17% of Swiss exports are destined for the US, a market deemed crucial. The tariffs are now impacting the Swiss economy, leading to reduced growth and potential job losses in key sectors.
Pharmaceuticals, a leading Swiss export to the US, are currently exempt from the 39% tariffs, but may be impacted by the 100% tariff on imported medicines recently suggested by President Trump. This would present a considerable challenge.
Another major Swiss export is the country’s advanced medical technology sector.
“It’s precision mechanics, with origins in the watchmaking industry,” explains Adrian Hunn, managing director of Swiss Medtech, the industry’s trade association.
The city of Biel, traditionally known for watchmaking and now home to medical technology firms, illustrates the potential for negative consequences stemming from Washington’s tariff policies.
MPS (Micro Precision Systems) produces medical devices ranging from aortic valve replacements to surgical drills used in hip and knee replacements, precisely the types of products needed in wealthy countries with aging populations like the US.
The manufacturing process is so precise that even the machines used in production are calibrated locally.
“It’s a very integrated way of working,” says MPS CEO Gilles Robert.
“Measuring equipment, milling tools, cutting liquids. It’s an ecosystem we have here in Switzerland.”
Mr. Robert’s showcase product is the engine for the only medically-registered artificial heart.
Only 120 of these have been transplanted worldwide. “It’s a pump that will pulse on both sides, to create beating in both chambers, and allow people waiting for a transplant, people with terminal heart deficiencies, to keep on living.”
This technology differs from the automotive industry, where components are made in various countries and assembled elsewhere.
Mr. Robert doubts that President Trump’s goal of moving production to the US would be successful.
“It would be extremely challenging, if not impossible, to separate the components from the actual product assembly,” he says. “And I think those types of skills would be extremely hard to find in the US.”
President Trump has said countries hit with tariffs will “eat them.” Can MPS absorb the 39%?
“They had the best price before the new tariffs came into effect,” says Mr. Robert.
“We don’t have the leeway to give a discount to our customers, because the margins are already as low as they can be.”
Instead, says Adrian Hunn of SwissMedTech, “Medical devices will get more expensive for US patients.”
He adds that US taxpayers will likely bear the burden. “Costs for hospitals and healthcare systems in the US in many cases are funded by public reimbursement programs, and this means taxpayers bear the burden.”
Perhaps more concerning for patients, as some high-precision medical devices are made solely in Switzerland, is the possibility that Swiss companies will cease exporting to the US.
“These are companies that have very good products,” says Jan Atteslander of Economiesuisse. “And they have told us, we just stopped delivering, sorry guys.”
Mr. Atteslander and Mr. Hunn concur with the Swiss government’s strategy of non-retaliation. It is believed that Switzerland cannot realistically challenge the US.
The Swiss are actively pursuing other markets. A trade deal with India – “the fastest-growing economy on the planet, 1.4 billion potential consumers,” Mr. Atteslander notes – went into effect on October 1.
An agreement with South American trade block Mercosur has also been concluded, Switzerland’s long-standing trade deal with China is being upgraded, and free trade with the EU, the destination for 50% of Swiss exports, remains intact.
While the US tariffs are already impacting the Swiss economy, and some hope for a change of heart from President Trump, there is confidence that Switzerland can weather the storm if necessary.
“To be a successful export nation, you have to have resilience in your DNA,” says Mr. Atteslander.
The more enduring consequence may be the damage to traditionally strong business relations between the two countries. There’s a sense of disillusionment in Switzerland. The US was not only a major market, but the Swiss valued doing business there.
Many considered the US to be more aligned with free-market principles than their EU partners. Now, Adrian Hunn of SwissMedTech and Gilles Robert of MPS have abandoned that view, at least for now.
“I lived six years in the US, so I was very close,” says Mr. Hunn.
“I have a lot of friends there. So, this, it didn’t change my view of America, but it did change my view, you know, of how the current administration in the US is acting globally, and treating allies.”
“I studied a year in the US,” says Mr. Robert.
“It had an impact on me, on my way of looking at the world. How you can take risks, be an entrepreneur, and be positive about the future.”
He adds hopefully, “Even though I’m sad about this situation, we will overcome, we’ll find solutions, and I’m sure in the end reason will prevail.”
A spokesman says the Nobel Committee placed “politics over peace” in awarding the coveted award to Venezuela’s opposition leader.
Trump’s budget director made the announcement amid the ongoing government shutdown
The text of the agreement lacks details and in some cases is vague and ambiguous – perhaps on purpose.
The First Lady has been directly engaged in diplomacy in Russia, pleading for the protection of children.
US President Donald Trump ordered his officials to pursue his political foe, who denies any wrongdoing.