Tariffs and a Test of Charm
Donald Trump is at it again, doing what he does best: threatening, applying pressure and then concluding deals he describes as “historic”. What is actually making history is the global stock market plunge, including Switzerland’s.
This time, Switzerland is particularly hard hit: a 31% tariff on exports to the US, a economic counter-attack. Instead of loudly protesting, the Swiss government is trying to outsmart the “deal-maker” with Swiss charm once more.
Of course, Switzerland is a fair trade partner. Of course, it has minimal tariffs. Of course, it plays by the rules. But does Trump care? No. His tariffs are not rational measures, but a political game of power. Switzerland can stress as much as it likes that it has not provoked a trade war – the reality is that Trump wants a concession, no matter the cost.
Switzerland is now crafting a counter-strategy: promising investments, just like it did with India. 100 billion francs for 20 years, a million jobs – it sounds big, but was a cleverly calculated deal. Will it work with the US? Maybe.
Because the US economy is not a booming region in need of investments. It is saturated, capital-strong and will not be impressed if a few Swiss companies promise to invest more. Moreover, Switzerland is already among the top six investors in the US. What’s left to offer? 500 billion? A new Silicon Valley “Made in Zug”?
Perhaps the government in Bern is simply hoping that Trump is bluffing. That Switzerland will still get an exception. But Trump’s world does not work that way. Those who do not give him something pay the price. Switzerland must decide: play along or pay the price.
There are alternatives – such as loosening agricultural products or medical technology regulations. But those are not “big deals”, but small favors. If the 31% tariff stays, the clever Swiss plan might end up as a sign of weakness, something Trump despises most.