US President Donald Trump raises his fist upon arrival at the White House in Washington, DC, on August 3, 2025 after spending the weekend at his Bedminster residence.
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Tensions and fears are running high in Switzerland, as the deadline to strike a trade agreement with the U.S. looms just days away.
Without a deal, Switzerland faces 39% duties on its goods imported into the U.S., after it was hit with one of the highest new tariff rates under U.S. President Donald Trump’s latest trade policy shift last week. The higher duty surprised many, as widespread reports had previously suggested a trade agreement was near, and was just missing Trump’s signature.
Over the weekend, reports emerged that the higher tariffs followed a disagreeable Thursday phone call between Swiss President Karin Keller-Sutter and Trump — which Swiss officials rejected, according to Reuters. The Swiss Federal Chancellery did not immediately respond to CNBC’s request for comment.
Guy Parmelin, Swiss federal council member and head of the Department of Economic Affairs, Education and Research, told local media that the government was open to tweaking its proposal to the U.S. — but that it may prove difficult to finalize by the Aug. 7 deadline, Reuters reported.
Swiss leaders are set to meet Monday to discuss the latest developments.
Elsewhere, U.S. Trade Representative Jamieson Greer somewhat dashed hopes of a flurry of imminent trade agreements, telling CBS News that he was not expecting the latest tariffs to be negotiated lower in the coming days, and that “these tariff rates are pretty much set.”
Concerns in the Swiss business community
Industry groups and business leaders have raised the alarm on potential fallout for businesses, which could include massive job losses.
“It was far more than a surprise. We were all shocked,” Jan Atteslander, head of the department international relations and member of the executive board at Economiesuisse, told CNBC’s Carolin Roth and Ritika Gupta on “Europe Early Edition” on Monday.
It would be difficult for Swiss businesses to offset the impact of a 39% tariff, Atteslander noted. “Such a high rate for many companies will just cut off trade, and we are convinced that a deal is still better for both sides than just cutting trade.”
He added that “there’s no substitute for the United States” in terms of export markets, despite Switzerland prioritizing diversification and Swiss businesses finding success around the world.
Key Swiss exports include chemical and pharmaceutical products, watches and jewelry, gold, chocolate and electronics.
Switzerland’s blue-chip SMI index was closed for a national holiday when the new U.S. tariff was announced Friday, but opened lower by around 1.2% at 8:30 a.m. in London on Monday. Shares of chemicals firm Sika fell 2.1%, while luxury groups Richemont and Roche traded around 1.5% lower.
The broader Swiss All Share Index was down by 1.5% in early deals.
Analysts at UBS said Friday that the direct impact on the overall Swiss equity market from the new duties would be “negative, but not destructive.” They flagged the worst-hit firms would include watch and machinery manufacturers, some medtech businesses and smaller companies that are more reliant on exports.
Fears have also emerged over the Swiss economic outlook in a no-deal scenario.
GianLuigi Mandruzzato, senior economist at EFG Asset Management, told CNBC’s “Europe Early Edition” on Monday that the risk of a Swiss recession had increased after the announcement, with U.S. export tariffs set to affect about 10% of the economy.
The levies would also put deflationary pressure on the economy and therefore on the Swiss National Bank, which has already cut interest rates to zero to stave off weak inflation and the strength of the Swiss franc, Mandruzzato added.
A deal ahead?
While business leaders are hoping for a Swiss-U.S. deal to be reached in time, there is currently a lot of uncertainty, according to Economiesuisse’s Atteslander.
While the Swiss government was working on a new offer, “it’s totally open at the moment,” he said.
It remains “very hard to tell” whether the government will be able to negotiate a better deal that the current 39% rate before the deadline, Mandruzzato said, with potential bargaining tools including higher purchases of U.S. energy or more direct investment by Swiss companies into the U.S.
“It seems that the trade negotiations with the U.S. eventually boils down to what Donald Trump prefers,” Mandruzzato said, adding that it was also difficult to assess what the final negotiation points could be.
— CNBC’s Carolin Roth and Ritika Gupta contributed to this report.
