Switzerland is bracing for one of the highest tariff rates on its imports to the U.S. as the deadline for a trade agreement between the two nations approaches.
The Swiss government is under immense pressure to secure a trade deal with the U.S. before the looming deadline. Failure to do so could result in a 39% tariff on Swiss exports to the U.S., reported CNBC.
Clock Ticks As Swiss Seek US Trade Deal
The U.S. imposed the new tariff rates following a contentious phone call between Swiss President Karin Keller-Sutter and President Donald Trump last Thursday.
Swiss officials will meet Monday to address the tariff dispute, but U.S. Trade Representative Jamieson Greer says rates are unlikely to change soon. Swiss minister Guy Parmelin indicated willingness to revise Switzerland's proposal, though meeting the August 7 deadline may be challenging.
Swiss Warn Tariffs Threaten Trade, Jobs And Growth
Swiss business leaders and industry groups have voiced concerns over the potential impact of the high tariffs, including significant job losses and disruption of trade. Capital Economics estimates that the tariff could reduce Swiss GDP by 0.6%, with a greater impact if pharmaceutical exemptions are lifted. Switzerland's key exports to the U.S. include gold, watches and jewelry, pharmaceuticals, chemicals, chocolate, and electronic goods.
Through May of this year, the U.S. recorded a nearly $50 billion trade deficit with Switzerland — the fifth-largest goods-trade gap among its trading partners.
Rahul Sahgal, chief executive of the Swiss-American Chamber of Commerce, told The Wall Street Journal, "We will never be able to import the same amount of goods from them as they will be able to from us. Even if the Swiss drink bourbon every day and buy a Harley-Davidson the trade deficit is not going to change."
Bessent Positive On More Deals As Economist Flags Recession Risk
This development comes in the wake of a broader shift in U.S. trade policy. Just last week, U.S. Treasury Secretary Scott Bessent expressed optimism about reaching a trade agreement with nations, even as President Trump launched a new round of tariffs affecting dozens of countries.
These developments have led to concerns about the health of the U.S. economy. Mark Zandi, Chief Economist at Moody’s Analytics, warned that the American economy stands "on the precipice of recession" following last week's disappointing economic data releases.
READ MORE:
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
