Ever since President Trump shocked the Swiss with a 39 percent tariff, one of the highest rates the world, the big question in Zurich, Geneva, Basel and across Switzerland is: Why us?
Known for its political neutrality, high-end watches and cutting-edge pharmaceuticals, Switzerland has long prized what it describes as an “excellent” relationship with America. But as Mr. Trump upends the global trading order, he has singled out countries that he says treat Americans “unfairly” by exporting more goods to the United States than they buy from it.
America’s trade deficit in goods with Switzerland was just over $38 billion last year. In the first six months of this year, the deficit ballooned to nearly $48 billion, for one main reason (more on that below).
Mr. Trump has railed against the deficit with Switzerland publicly and behind closed doors. In a phone call last week with the Swiss president, Karin Keller-Sutter, Mr. Trump stressed that the country had not done enough to address the deficit.
Since then, the Swiss have pushed for continued talks with the Trump administration and are devising a more attractive offer to persuade Mr. Trump to reduce tariffs on Swiss goods.
What’s driving the U.S. trade deficit with Switzerland?
Swiss exports to the United States are dominated by a handful of industries.
The most distinctive is gold refining. In recent months, two-thirds of Switzerland’s exports to the United States were accounted for by various forms of gold. These bars of gold are often sent from London, a trading hub, to Switzerland, a refining hub, where the metal is forged into bars sized for the standards required by U.S. warehouses and then shipped across the Atlantic.
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