Switzerland Seeks US Trade Accord Amid Tariff Threat

Bern Pushes for Dialogue as Trump’s 39% Duty Looms

Switzerland is determined to continue trade negotiations with the United States, even as President Donald Trump’s proposed 39% tariff on Swiss goods threatens economic stability. Analysts warn of a potential recession if the duties are implemented.

Economic Fallout Feared

A 39% tariff would significantly impact Switzerland’s economy, particularly its vital pharmaceutical and chemical sectors. These industries account for half of Swiss exports to the U.S., with medicines and cancer treatments forming a substantial portion.

Beyond pharmaceuticals, traditional Swiss strengths like watchmaking, precision engineering, and luxury goods would also face considerable pressure. The export of gold, a major commodity for Switzerland, is also at risk; the country shipped 500 tons worth nearly 40 billion Swiss francs in the first six months of this year.

Even food exports, such as those from Nestlé, could be affected. Zurich’s ETH Zurich estimates that such tariffs could reduce Swiss GDP by 0.3% to 0.5%, with some experts predicting a steeper impact of up to 1%.

#Brentscheid US-Zölle: The Federal Council has decided to continue negotiations with the USA, if necessary even after August 7, 2025. https://t.co/dxOpTYbGCn @DefrWbf

— Bundesrat • Federal Council • Federal Consiglio (@br_sprecher) August 4, 2025

Negotiations Continue Amidst Bargaining Culture Clash

Tomáš Jan Podivínský, the Czech Ambassador to Switzerland, noted the complexities of the negotiations. He stated, “I see an effort to agree on a reasonable compromise. It is not easy mathematics between Swiss and Americans.”

Switzerland is reportedly preparing a more attractive offer to present to the U.S. government. The Swiss Federal Council confirmed its intent to extend discussions beyond the August 7 deadline.

Experts suggest that while the U.S. holds a stronger negotiating position, Swiss adherence to traditional, systemic approaches may be clashing with current American bargaining tactics. Initial Swiss expectations for a deal, as high as 10-15%, have been overshadowed by Trump’s escalating demands.

Switzerland Aims for Compromise, Not Retaliation

Regarding potential responses, Ambassador Podivínský believes Switzerland will avoid direct countermeasures like reciprocal tariffs or WTO disputes. He also doubts that Switzerland would use strategic purchases, such as the planned acquisition of 36 F-35 fighter jets from the U.S., as leverage.

“Almost with certainty, I would exclude some countermeasures from Switzerland type reciprocal customs duties, lawsuit at the WTO (World Trade Organization) or some interference of large strategic orders, such as buying 36 F-35 fighters from the United States. I think that wouldn’t go anywhere.”

—Tomáš Jan Podivínský, Czech Ambassador to Switzerland

Instead, Switzerland is expected to offer concessions, potentially in sectors like pharmaceuticals or engineering, or through guaranteed Swiss investments in the U.S. Energy imports, such as liquefied natural gas, are a possible area for such concessions.

EU Relations and Swiss Autonomy

Recent commentary suggesting Switzerland stands alone has amplified discussions about closer cooperation with the European Union. However, Ambassador Podivínský does not see a direct link between the U.S. tariffs and Switzerland’s relationship with the EU. Instead, he suggests the trade dispute is fueling an ongoing debate about a new bilateral agreement with the EU.

The Swiss public’s deep-seated value of self-determination and neutrality plays a significant role in national decision-making, including potential referendums on international agreements. This independent streak influences Switzerland’s approach to foreign policy and trade.

Switzerland is the sixth-largest investor in the U.S., and the U.S. is Switzerland’s second-largest trading partner after the EU. The economic ties are substantial, supporting over 400,000 jobs. Switzerland’s critical role as a supplier of certain oncological and pharmaceutical products to the U.S. further complicates the trade dispute.

Today I had a last conversation with US President Trump before the deadline for the US tariffs. For the president, the focus is on trade deficit. There was no agreement on the declaration of intent negotiated between Switzerland and the USA. pic.twitter.com/qXwPCueovY

— Karin Keller Sutter (@keller_sutter) July 31, 2025

The significant interdependencies mean that a complete breakdown in trade relations is unlikely, as both nations seek to avoid widespread economic disruption.