Customs war with Trump: Swiss products in danger – Federal Council sounds the alarm!

Customs war with Trump: Swiss products in danger – Federal Council sounds the alarm!

Last Wednesday, the Federal Council of Switzerland approved an important mandate for negotiations with the USA in the customs dispute. The background to these negotiations is the threatened introduction of punitive tariffs of 31 percent on Swiss products, which are due to come into force from July 3, 2025 Lucerne newspaper reported. The Swiss government sees the negotiations as a necessary measure to avert the negative consequences for the export industry.

The Federal Council has already prepared for the upcoming negotiations in preliminary discussions with US trade delegates and the Finance Minister. Various topics are planned for discussion. These include improving market access for US agricultural products such as nuts, citrus fruits and seafood, as well as simplifying the approval of medical products. Tax aspects and questions about vocational training are also addressed.

Heated discussions in the Federal Palace

There were heated discussions in the Federal Palace about the negotiation offers and the pace at which the talks should be progressed. Some voices in the Federal Council support a cautious approach and warn against a high pace of negotiations. In the meantime, rumors have emerged that an increase in drug prices in Switzerland is being considered as a means of putting pressure on the USA. President Trump has said in the past that he plans to reduce high pharmaceutical prices in the United States and demand similar price increases from other countries.

The situation is also complicated by the fact that the Federal Council is already beyond the time frame for a declaration of principles with the USA and obviously needs more time to steer the talks in the right direction. Insiders report that the US administration cannot devote the necessary time to Switzerland due to other pressing priorities, further complicating the negotiation process.

The impact on the Swiss economy

The upcoming tariffs particularly affect the Swiss watch industry, machine industry and medical technology, whose export values ​​are significant. The watch industry amounts to 4 billion francs, the machinery industry to 3.1 billion francs. Popular Swiss foods such as chocolate and cheese, which have an export value of over 100 million francs, are also affected. Compared to other countries in Europe, the US government plans to introduce higher tariffs for Switzerland - the EU, for example, expects 20 percent, Great Britain 10 percent.

The impact on Swiss exporters could be serious. Around half of the companies involved expect the new tariffs to have adverse effects. Smaller companies in particular could lose access to the US market, which would jeopardize jobs and innovation. The Swiss pharmaceutical industry, which accounts for 59 percent of exports to the United States, also faces potential challenges.

The current unemployment rate in Switzerland is 2.9 percent, but could rise to up to 3 percent due to customs policy. Trade unions have not yet expressed any alarmist tone, but have emphasized the relevance of the situation for the export industry. Economic forecasts suggest that economic growth could be 0.2 to 0.3 percentage points lower if the tariffs are actually implemented.

Federal President Karin Keller-Sutter commented on the Swiss position in a 25-minute telephone conversation with Donald Trump. Economics Minister Guy Parmelin emphasized the importance of positive signals for Swiss investments in the USA. With this diplomatic commitment, the Federal Council is trying to create a stable basis for the negotiations and to represent Swiss interests at the forefront, as stated by Swissinfo reported.