By Moiz Shaikh
Switzerland was stunned Friday as the United States slapped a 39% tariff on Swiss exports—the highest among all European nations—causing a wave of national frustration and disbelief. Globally, only Syria, Laos, and Myanmar face higher rates, with Brazil poised to top the list if President Trump carries out his threat of a 50% levy.
Swiss headlines called it the most humiliating economic blow in centuries, with the tabloid Blick likening it to Switzerland’s historic defeat at Marignano in 1515.
This escalation comes as a total shock. Just a few months ago, Switzerland was optimistic about reaching a favorable deal with Washington. In May, Swiss President Karin Keller-Sutter hosted U.S.–China trade peace talks in Geneva and managed a bilateral with U.S. Trade Secretary Scott Bessent. She returned optimistic, claiming that Switzerland was next in line—after the UK—to seal a tariff agreement, with expectations of a modest 10% rate.
Instead, that optimism has crumbled. A final phone call between Keller-Sutter and President Trump just hours before the August 1 deadline ended without resolution. The White House soon confirmed an even higher-than-threatened 39% tariff, up from the originally proposed 31%.
Critics are divided over the Swiss government’s approach. Some say their negotiating team was too soft, others too aggressive. But many believe the harsh tariff has less to do with tactics and more with Switzerland’s size—and a U.S. president eager for big wins on the global trade stage.
The main friction point? America’s trade deficit with Switzerland, which stood at $47.4 billion in 2024. President Trump has long viewed trade deficits as harmful, despite skepticism from mainstream economists. If services are factored in, the deficit falls to $22 billion, but the Trump administration only cited goods in its justification.
In an effort to appease Washington, Switzerland eliminated tariffs on U.S. industrial imports and pledged major investments in American manufacturing. Corporate giants like Nestlé and Novartis committed to billions in U.S. plants. Switzerland, already the 6th largest foreign investor in the U.S., claims to support 400,000 American jobs.
Despite these overtures, the White House wasn’t satisfied. With only 9 million people, Switzerland struggles to “balance” trade. Alpine roads aren’t suited to large American cars, and U.S. food products—cheese and chocolate in particular—don’t align with local tastes.
The business community is dismayed.
“We need reliable relations with the United States,” said Jan Atteslander, foreign trade head at EconomieSuisse, in a televised interview. Many see this unpredictability as a threat to long-term planning and stability.
With tariffs set to activate on August 7, Switzerland has just days to alter the outcome. Business leaders are warning of widespread job losses. The only bargaining chips left are aggressive ones: reversing investment plans, imposing retaliatory tariffs, or the ultimate pressure point—canceling a major order for U.S.-made F-35 fighter jets.
The timing has stung deeply. The tariff announcement arrived just ahead of Swiss National Day, typically a celebration of pride and independence. Instead of waving flags, many Swiss are now questioning their treatment on the global stage—punished, they feel, for being too successful and too small.
Still, some voices remain hopeful. Switzerland has weathered economic storms before, and its famed resilience and innovation might be the key to navigating this one, too.
