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Switzerland said it was one of 15 countries after agreeing to engage in expropriation negotiations with the Trump administration.
Swiss President Karin Keller-Sutter will hold taxes at a 10% tax rate during negotiations, even as they extend Donald Trump’s 90-day tariff pause.
“There is no fixed timetable. But it’s clear that if you’re negotiating, the 90-day deadline will be extended,” Keller-Sutter told reporters. “Switzerland is one of the 15 countries that get some preferential treatment here, which is great.”
Keller-Sutter, who is also the Treasury Secretary, lobbied U.S. government officials in Washington because of mutual tariffs on Swiss imports. Trump has promised to look at the 31% tax plan again for Switzerland, which is much higher than the 20% plan.
The Swiss president also discussed with Best about non-tariff trade barriers, subsidies and taxes as concerns arising from the double blow to interest and the competitiveness of fierce currencies.
Market uncertainty arising from Trump’s trade war means investors continue to be attracted by the security status of Swiss Franc. This puts pressure on Switzerland’s export-oriented economy, and central banks’ freedom of intervention to address the benefits, suppressed by fears that the United States will brand currency manipulators.
“This shows a double impact on Swiss companies exporting to the United States,” said Hans Gersbach, deputy director of the KOF Institute for Economic Research in Zurich.
Co-owner and CEO Guy Petignat said new orders plummeted in Falu AG, a machine maker that makes cotton swabs and mats, and tariff uncertainty stopped investing.
“That’s the real poison.” CEO, who is preparing to meet with the United States, is volatile every year, accounting for one-third of the company’s revenue, headquartered in Ruetti, near Lake Surici. “There is no obvious place we are going, and everyone holds it for three months.”
According to Petignat, it is a crisis that could be scrapped with the impact of the Covid-19 pandemic or the 2015 Swiss National Bank on the Frank cap.
Even though the Swiss government abandoned its growth forecast for this year, the prospect of Trump’s exemption of pharmaceutical companies, Switzerland’s largest exporter, has so far weakened planned tariffs.
That could change as Trump regularly threatens drug taxation, but Keller-Sutter is very optimistic after meeting with Beston.
“So, no statements were made because no decisions have been made,” she said. “I have some impression that it may not happen.”
To stop this impact, the largest Swiss pharmaceutical companies (Roche Holding AG and Novartis AG) are transferring production to the United States, guaranteeing investments of $50 billion and $23 billion respectively.
Although the pharmaceutical industry has made the Swiss economy more resilient to currency volatility, the powerful francs are still hurt. The currency has praised the dollar against the dollar since Trump took office.
Roche said on Thursday that it expects the exchange rate to remain at the April 23 level due to currency effects, and sales in 2025 are expected to decline by 5 percentage points.
Nestlé SA chief financial officer Anna Manz told analysts the same day that the Franc’s recent strengthening will “see the impact on future sales.”
SNB has limited rooms for pain relief, with a benchmark interest rate of 0.25%, the lowest in the world. The intervention of central banks to weaken the francs has also attracted Trump’s first term, with the U.S. Treasury Department placing Switzerland as a currency manipulator.
“SNB has two terrible options,” said Ipek Ozkardeskaya, senior analyst at Swissquote. “Downgrade or increase Trump’s anger through interventions again during the crucial three-month negotiations.”
Ozkardeskaya expects SNB to initially lower interest rates before evaluating whether further action is needed to tame the francs. Economists at UBS Group AG recently said the central bank would lower its benchmark interest rate to zero when officials met in June.
Currently, manufacturers like Falu, as well as Swiss makers such as Rolex and Patek Philippe, may have to adjust prices and accept lower profit margins, hoping that tariffs and francs will be short-lived, which is a short-lived trend.
“If the shock is not temporary, then a bigger adjustment will be needed,” he said.
Keller-Sutter highlighted Swiss investment in the United States, noting that Switzerland unilaterally lifted industrial tariffs last year, but was not sure whether this would meet the Trump administration focused on the trade deficit. The Swiss president warned on Thursday that businesses cannot live with uncertainty and that she is excited about the prospects for negotiations despite the government’s goal of zero tariffs.
“I don’t think we’re going to go back to the old orders completely,” Keller Sett said. “We have to meet new orders somehow.”
With the assistance of Sonja Wind and Dylan Griffiths.
This article was generated from the Automation News Agency feed without the text being modified.
