Washington (AFP) – The United States and Switzerland reached an agreement Friday to sharply lower tariffs imposed by President Donald Trump, officials said, with the Alpine nation vowing to invest $200 billion in the US to win over the White House. The deal was announced a day after talks in Washington, where Swiss economy minister Guy Parmelin visited in hopes of easing steep duties the Trump administration rolled out this year.
Trump shocked Switzerland in August when he imposed a 39-percent duty on imports of goods from the country, among the highest in his global tariff blitz. “We’ve essentially reached a deal with Switzerland. So we’ll post details of that today on the White House website,” US Trade Representative Jamieson Greer told CNBC in an interview.
Switzerland’s government said it and the United States have reached an agreement where US tariffs will be slashed from their current 39-percent level to 15 percent. As part of the deal, “Swiss companies intend to make $200 billion in direct investments in the United States by the end of 2028,” a government statement said. This would also include efforts to strengthen vocational education and training. Greer said the Swiss would send manufacturing, such as pharmaceuticals, gold smelting, and railway equipment to US shores.
– Cautious relief –
The high tariff rate had jeopardized entire sectors of the export-heavy Swiss economy, notably watchmaking and industrial machinery, but also chocolate and cheese. While the pharmaceutical industry, Switzerland’s largest export sector, had enjoyed an exemption from tariffs on medications, it faced regular threats that Trump would soon target them too.
Swissmem, the association of the mechanical and electrical engineering industry, expressed relief at Friday’s announcement. Swiss businesses have been worried that their competitors in other wealthy economies will have an edge over them, given that the European Union and Japan had negotiated lower tariff levels of 15 percent. While Swissmem noted that the deal brings “temporary relief,” its president Martin Hirzel warned that “we must not let our guard down. New tariffs could be introduced.”
Last week, the heads of six top Swiss firms, including watchmaker Rolex and luxury goods giant Richemont, met with Trump to plead for relief from the tariffs. Yves Bugmann, president of the Federation of the Swiss Watch Industry, said that the announced tariff reduction was good news for an industry facing challenges including an unpredictable Chinese market. He added that the high rate had been “unjustified and caused a great deal of uncertainty” in the sector.
Trump has imposed sweeping duties on trading partners around the world since returning to the presidency, with separate levies on specific sectors like steel, aluminum, and autos.
© 2024 AFP
