Trump Raises Tariff Rate After Call With Swiss President
Threatens Pharmaceutical Tariffs on "60% of Swiss Exports to US"
Swiss President Returns Home Without Meeting Commerce Secretary
Swiss President Karin Keller-Sutter, who was hit with a 39% tariff bomb by the Donald Trump administration, made an urgent trip to the United States but returned home empty-handed after failing to meet President Trump. Yonhap News reported on the 6th (local time) that "President and Finance Minister Karin Keller-Sutter and Economic Minister Guy Parmelin visited the US in an attempt to lower the mutually imposed tariff rate, which had been notified at 39%, but achieved little success."
On the 6th (local time) in Washington DC, USA, Swiss President Calmy-Rey and Economic Minister Parmelin concluded their meeting with US Secretary of State Rubio. Photo by AFP Yonhap News
According to Yonhap News, President Keller-Sutter held a 45-minute meeting with Secretary of State Marco Rubio in Washington, DC, on this day. President Keller-Sutter told reporters, "It was a good meeting. We had a friendly and open conversation," but did not disclose what proposals were made to lower the tariff rate. Secretary Rubio stated on social media, "We discussed the importance of fair and balanced trade relations between the United States and Switzerland," and added, "We also reaffirmed our commitment to strengthening mutual defense cooperation."
On July 31, President Trump announced that a 39% reciprocal tariff would be imposed on Swiss-made watches, pharmaceuticals, and machinery. This is an increase of 8 percentage points from the 31% first announced in April. Foreign media interpreted this as a result of President Trump’s anger over Switzerland’s perceived lack of effort to reduce its trade deficit with the United States. Minister Parmelin explained that the phone call between the two countries’ leaders at that time "was not successful," but added, "There was no argument between the leaders. President Trump had a completely different perspective from the very beginning."
The Swiss government reportedly held a special cabinet meeting on August 4 to discuss countermeasures. Minister Parmelin stated, "We must first clearly understand why President Trump made this decision. Only after that can we decide what actions to take."
Keller-Sutter and Parmelin made an urgent trip to the United States to meet President Trump, but, due to not arranging an appointment in advance, they were also unable to meet Howard Lutnick, the Secretary of Commerce responsible for trade negotiations. Bloomberg reported, "President Keller-Sutter made new proposals to US officials, but it is unlikely that she will achieve better results before returning home."
Once the new tariff rate takes effect, Switzerland will face tariffs 2.6 times higher than the 15% agreed with the European Union (EU) and 3.9 times higher than the 10% imposed by the United Kingdom. President Trump also announced that pharmaceutical tariffs could be raised to as much as 250% in the future. Considering that about 60% of Switzerland’s exports to the US are pharmaceuticals, this is expected to deal a significant blow to the Swiss export economy. Bloomberg projected that even with a 39% tariff on pharmaceuticals, Switzerland’s gross domestic product (GDP) would decrease by 1% in the medium term.
Swiss public broadcaster SRF criticized, "The president’s trip to the US stands in stark contrast to Switzerland’s founding narrative of not flattering foreign powers," and added, "The highest tariff rate in Europe seems to have been decided at the whim of the US president."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
