US to cut Swiss tariffs to 15% under new trade framework, easing earlier shock levy

The Swiss government said on Friday that the United States will cut its tariffs on goods from Switzerland to 15%, down from the steep 39% rate imposed earlier, under a new framework trade agreement.

The announcement came after US Trade Representative Jamieson Greer stated that Washington had “essentially reached a deal with Switzerland” and would unveil further details later in the day.

The development followed talks in Washington, where Swiss economy minister Guy Parmelin sought relief from the heavy duties introduced by the Trump administration this year.

Greer told CNBC the agreement would involve Switzerland moving “a lot of manufacturing here to the United States — pharmaceuticals, gold smelting, railway equipment,” adding that the US was “really excited” about what the deal could mean for American industry.

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He confirmed that Washington would retain a tariff on Swiss imports under the arrangement, though he did not specify the planned 15% rate.

The Trump administration’s sudden decision in August to levy a 39% tariff on Swiss goods — one of the highest in its series of trade measures — had taken Bern by surprise.

Greer reiterated on Friday that Switzerland was expected to shift significant manufacturing operations to the US, including in pharmaceuticals, gold smelting and railway equipment.

The US Trade Representative’s office did not immediately comment on additional details of the anticipated trade agreement.

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Trump shocked Switzerland in August when he imposed the 39-percent duty on imports of goods from the country, among the highest in his global tariff blitz.

But Greer told CNBC on Friday that the Swiss were expected to send a lot of their manufacturing to the United States, such as pharmaceuticals, gold smelting and railway equipment.

The USTR’s office did not immediately respond to queries about further details of the expected trade pact.

The Swiss government has scheduled a news conference for 4:00 pm (1500 GMT) to give more details of the agreement.

Cautious relief

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, among others, had earlier negotiated lower tariff levels of 15 percent.

While Swissmem noted that the announced deal provides some respite, its president Martin Hirzel warned: “The reduction in tariffs is a temporary relief for the tech industry, but we must not let our guard down. New tariffs could be introduced."

He urged officials to make further efforts in reducing costs and opening new markets.

Last week, the heads of six top Swiss firms, including the chiefs of watchmaker Rolex and luxury goods giant Richemont, met with Trump to draw his attention to the toll his tariffs are taking on their companies.

Trump has imposed sweeping duties on trading partners around the world since returning to the presidency, with separate levies on specific sectors like steel, aluminium and autos.

The high tariff rate jeopardizes 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.

With inputs from agencies