Swiss president rushes to Washington amid tariff turmoil

• Swiss President Karin Keller-Sutter and Economy Minister Guy Parmelin are conducting shuttle diplomacy to negotiate with the U.S. government and mitigate the impact of the newly imposed 39 percent tariffs.
• The Swiss government insists that its trade surplus with the U.S. is due to its role as a gold refining hub and a strong pharmaceutical sector, not unfair trade practices, following a call between Keller-Sutter and U.S. President Donald Trump.
• The 39 percent tariff poses a significant risk to Switzerland’s economy, potentially affecting up to one percent of its economic output, given the country’s heavy reliance on exports like pharmaceuticals, watches and gold.
• Switzerland is considering various concessions to appease the U.S., including changes to agricultural tariffs, adjustments to the gold trade, leveraging aircraft purchases and pressuring pharmaceutical companies to invest more in the U.S. and lower drug prices.
• The Swiss government faces the challenge of making concessions that are politically acceptable at home while addressing U.S. concerns, with the urgency of the situation highlighting the need for a delicate and creative approach to avoid economic repercussions.

In a last-ditch effort to mitigate the impact of the tariffs, Swiss President Karin Keller-Sutter and Economy Minister Guy Parmelin are engaging in shuttle diplomacy, hoping to present a more attractive offer to the U.S. government.

The Swiss government has emphasized its willingness to address U.S. concerns, citing its significant foreign direct investments and research and development activities in the United States. However, the Swiss are treading carefully, as any concessions could be politically sensitive at home.

The sudden imposition of the 39 percent tariff last week came as a shock to the Swiss, who had believed that negotiations were progressing favorably. The decision followed a Thursday night call between U.S. President Donald Trump and Keller-Sutter, which reportedly focused on Switzerland’s trade surplus with the United States. The Swiss government has insisted that this surplus is not due to unfair trade practices but rather a result of the country’s role as a major refining hub for gold and its strong pharmaceutical sector. (Related: President Trump announces new tariff rates to compete globally and rebuild American economy.)

The stakes are high for Switzerland, with Bloomberg Economics estimating that the 39 percent tariff could put up to one percent of the country’s economic output at risk over the medium term. This is particularly concerning given that Switzerland’s economy is heavily reliant on exports, with pharmaceuticals, watches and gold being key drivers.

Potential concessions

In the bid to secure a deal, the Swiss are considering a range of concessions:

• Agricultural tariffs: While Switzerland abolished industrial tariffs in 2023, it maintains tariffs on agricultural products. Any concessions in this area would be politically sensitive, as Swiss farmers have vowed to resist changes. However, the symbolic win for Trump could be significant, despite agriculture’s small share of the Swiss economy.
• Gold: Addressing the trade deficit could involve imposing a high tariff on gold, which accounts for a large portion of the deficit. Alternatively, transferring the bullion trade to a state institution could remove it from the trade balance, potentially appeasing Trump.
• Planes: Switzerland’s purchase of 36 F-35 fighter jets from Lockheed Martin could be leveraged, with the possibility of accepting a higher price or ordering additional planes to sweeten the deal.
• Drugs, investments and energy: The Swiss government may pressure pharmaceutical companies like Novartis and Roche to invest more in the U.S. and consider lowering drug prices. Additionally, pledges for U.S. investments and commitments to purchase U.S. energy, particularly liquefied natural gas, could be part of the package.

The challenge for Keller-Sutter and Parmelin is to make concessions that are politically palatable while addressing Trump’s concerns about the trade deficit. As Stefan Legge of the University of St. Gallen noted, “Switzerland has to get creative.”

The Swiss government is acutely aware that any misstep could have dire economic consequences. As the Swiss delegation engages in intense negotiations in Washington, the outcome remains uncertain. The urgency of the situation is palpable, with the Swiss government hoping to avert a potential economic downturn.

The world will be watching closely to see if Keller-Sutter and Parmelin can secure a deal that protects Switzerland’s economic interests while appeasing the Trump administration. The stakes are high and the clock is ticking.

Watch the video below that talks about Trump’s tariff deadlines for Europe and Mexico.

This video is from the NewsClips channel on Brighteon.com.

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Sources include:

ZeroHedge.com

Bloomberg.com

Brighteon.com