Switzerland’s Sin of Confidence
The optimistic stance taken during negotiations with the United States rested on a long list of rational economic arguments and the notion of a special relationship. It would perhaps have made sense with an American president other than Donald Trump.
The 31% tariff applied to Switzerland on “Liberation Day” in early April had already come as a surprise. Federal authorities and economic circles were, however, quickly reassured. Washington was leaving the door open to negotiations and Bern was ready to seize the opportunity with arguments that were constantly put forward: Switzerland is the sixth largest foreign investor in the U.S.; American products entering the country are not taxed when services are taken into account; plus, the not-so-negative trade balance. President Karin Keller-Sutter was even able to speak directly with Trump the week after the tariff announcement.
Despite the approaching deadline, optimism still prevailed early in the week, at least officially, after the deal struck between the U.S. and the European Union. Switzerland had a basis for an agreement; the only thing missing was Trump’s approval. A return to 31% seemed unthinkable. The hope was for a rate below the 15% levied on the EU, which, forced to negotiate, had at one point threatened to retaliate with its own weapons. In the end, it would be 39%. A crushing blow.
An Illusory Special Relationship
After the April 2 announcements, surprise was understandable — not about the tariffs, which were promised by Trump during his campaign, but about their severity. Today, being unprepared for the worst-case scenario is a serious mistake. When the return of the Republican to the White House became a reality last fall, some were enthusiastic, seeing an opportunity to reopen the case for a free trade agreement.
The arguments in favor of a possible agreement are entirely true and rational. But the idea that Switzerland, a liberal country open to negotiation, would have a privileged relationship with Trump’s United States is a pipe dream that should have been abandoned months ago. Since taking office, the American president has repeatedly shown no hesitation in attacking historic allies of his country. His apparent fixation on trade deficits, and multiple flip-flops, were all clues that rationality and goodwill have little importance in these discussions.
The reality is that Switzerland is not a priority for Trump. Its small size offers fewer means of exerting pressure, unlike China or the EU. One can question the reasons for the rate increase or the weight of big pharma in the discussion at a time when the president is seeking a decrease in the cost of medications. The possibility of new negotiations cannot be completely ruled out, but the fact is that Switzerland is politically isolated with little leverage.
The 31% tariff applied to Switzerland on “Liberation Day” in early April had already come as a surprise. Federal authorities and economic circles were, however, quickly reassured. Washington was leaving the door open to negotiations and Bern was ready to seize the opportunity with arguments that were constantly put forward: Switzerland is the sixth largest foreign investor in the U.S.; American products entering the country are not taxed when services are taken into account; plus, the not-so-negative trade balance. President Karin Keller-Sutter was even able to speak directly with Trump the week after the tariff announcement.
Despite the approaching deadline, optimism still prevailed early in the week, at least officially, after the deal struck between the U.S. and the European Union. Switzerland had a basis for an agreement; the only thing missing was Trump’s approval. A return to 31% seemed unthinkable. The hope was for a rate below the 15% levied on the EU, which, forced to negotiate, had at one point threatened to retaliate with its own weapons. In the end, it would be 39%. A crushing blow.
An Illusory Special Relationship
After the April 2 announcements, surprise was understandable — not about the tariffs, which were promised by Trump during his campaign, but about their severity. Today, being unprepared for the worst-case scenario is a serious mistake. When the return of the Republican to the White House became a reality last fall, some were enthusiastic, seeing an opportunity to reopen the case for a free trade agreement.
The arguments in favor of a possible agreement are entirely true and rational. But the idea that Switzerland, a liberal country open to negotiation, would have a privileged relationship with Trump’s United States is a pipe dream that should have been abandoned months ago. Since taking office, the American president has repeatedly shown no hesitation in attacking historic allies of his country. His apparent fixation on trade deficits, and multiple flip-flops, were all clues that rationality and goodwill have little importance in these discussions.
The reality is that Switzerland is not a priority for Trump. Its small size offers fewer means of exerting pressure, unlike China or the EU. One can question the reasons for the rate increase or the weight of big pharma in the discussion at a time when the president is seeking a decrease in the cost of medications. The possibility of new negotiations cannot be completely ruled out, but the fact is that Switzerland is politically isolated with little leverage.
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