Switzerland was left reeling following Trump’s decision to lay a 39% tariff on them, one of the highest rates imposed in his sweeping global trade reset.
Announced on Friday, coinciding with the country’s National Day holiday, industry leaders warned the move could cost tens of thousands of jobs and tip the Swiss economy into recession.
Negotiators in Bern had reportedly believed they were on the brink of securing a 10% tariff after three months of talks with Washington. But a reportedly tense and “disastrous” 30-minute phone call between Trump and President Keller-Sutter on Thursday evening appears to have upended those efforts.
The call, variously described in the press as “bad-tempered” and “badly misjudged,” was followed by Trump imposing a 39% levy, surpassing even the 31% duty he previously floated during his “liberation day” speech in April.
Switzerland’s blue-chip stock index opened 1.8% down on Monday, the first day of trading since the announcement. The federal cabinet is expected to meet later in the day to consider its next steps.
Government officials dismissed speculation that the call directly triggered the higher tariff but conceded it had not helped.
“The call was not a success,” one source told Reuters. “There was not a good outcome for Switzerland. But there was not a quarrel. Trump made it clear from the very beginning that he had a completely different point of view, that 10% tariffs were not enough.”
Swiss media, however, offered a harsher verdict. Blick headlined: “Faced with Trump, Keller-Sutter was surely too naive,” while 24 Heures called the episode “the heaviest defeat of her political career,” lamenting that what should have been a diplomatic triumph had turned into a disaster.
Hans Gersbach, an economist at ETH Zürich, warned that the tariff risked triggering a recession, especially if pharmaceutical products, which are currently excluded, were later added to the list.
The blow is significant for Switzerland’s export-driven economy, with the U.S. accounting for about one-sixth of its total foreign sales. Among America’s trading partners, only Laos, Myanmar, and Syria face steeper duties, ranging from 40% to 41%. By comparison, the EU and UK have negotiated 15% and 10% tariffs respectively.
Economy Minister Guy Parmelin told Swiss public radio RTS on Monday that the government was working swiftly to “fully understand what happened” and why Trump made the decision. He said Bern would revise its offer and “hope to achieve something” before 7 August, when the tariffs are due to come into effect.
Both Parmelin and Keller-Sutter have signalled their willingness to travel to Washington for further talks if necessary. Parmelin added that Trump was particularly fixated on the U.S. trade deficit with Switzerland, which stood at 38.5 billion Swiss francs last year.
In response, Bern could explore options such as purchasing more U.S. liquefied natural gas, as the EU previously agreed to do, or encouraging additional Swiss investment in the U.S., Parmelin suggested.
Speaking on Friday, Keller-Sutter said that Switzerland remained committed to dialogue with the U.S. but warned there were only limited concessions it could offer. She noted that U.S. imports already enjoy 99.3% free market access to Switzerland, and that many Swiss firms have already made significant investments in the American market.
Despite the current crisis, analysts believe the situation remains fluid. Some suggest the tariff rate could yet be reduced, citing the unpredictability of the Trump administration. “Our base case remains that Switzerland will eventually end up with a rate more in line with the EU’s,” one trade consultant told Neue Zürcher Zeitung.
