Switzerland got a rude awakening on Friday, a national holiday, after President Trump imposed a 39 percent tariff on goods imported from the Alpine country, one of the highest rates of any country. Karin Keller-Sutter, the Swiss president, said that she had spoken with Mr. Trump on Thursday but that “no agreement could be reached.”
The Swiss were already indignant about Mr. Trump’s initial threat, in April, to levy a 31 percent tariff on their goods. When the White House announced revised rates late on Thursday, the Swiss were shocked to see that already steep rate raised further. Many other tariffs were maintained or lowered somewhat by Mr. Trump’s revisions.
Now, Swiss products imported in the United States, including pharmaceuticals, precision instruments and even coffee capsules, will be subject to the 39 percent tariff if the two sides don’t hash out a trade deal by Aug. 7.
Stefan Legge, the head of tax and trade Policy at Switzerland’s Institute for Law and Economics, said that a deal could still happen at any time, given Mr. Trump’s track record of surprise announcements. “But the most annoying thing is that we are still in this situation of uncertainty,” he said.
Swiss business associations called for urgent negotiations and warned that without a trade agreement, Swiss goods in America would become significantly more expensive than goods imported from the European Union, which negotiated a 15 percent tariff, or Britain, with a 10 percent tariff.
Shares of Watches of Switzerland, a London-listed seller of high-end timepieces, a major Swiss export, tumbled over 6 percent, to their lowest level in years.
Ms. Keller-Sutter said that for Mr. Trump, the U.S. trade deficit with Switzerland was “a key issue” behind the tariff rate. But over half of Switzerland’s trade gap with the United States comes from gold bullion and bars refined in Swiss foundries and exported in large quantities to America. The Swiss central bank has suggested gold shouldn’t be counted in the trade balance sheet. Gold imports are exempt from Mr. Trump’s tariffs.
Excluding gold, pharmaceutical products are Switzerland’s largest export to the United States. The drug industry, including the Swiss pharma giants Roche and Novartis, is on edge after the Trump administration sent letters to all major pharma firms on Thursday demanding that they offer lower prices for American consumers.
Liz Alderman is the chief European business correspondent, writing about economic, social and policy developments around Europe.
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