Switzerland could see economic problems from Trump’s tariffs

President Donald Trump’s tariffs are causing economic stress for countries around the world, but Switzerland has become an unlikely target for some of the White House’s import taxes. The wealthy Alpine nation has been hit with one of the Trump administration’s highest tariff percentages; this has led to people across Switzerland, a country that typically stays out of global conflicts, wondering why the nation is in Trump’s crosshairs and what it means for the Swiss economy.

Switzerland has among the world’s highest tariffs

The Trump administration has imposed a 39% tariff on Swiss exports, the sixth-highest among any country. The high tax came as a “surprise to the European country” given that a “trade agreement had seemingly been imminent,” said CNBC. While Switzerland has remained mostly neutral in recent American affairs, Trump has long railed against the country.

This despite Switzerland being “long prized” for what it “describes as an ‘excellent’ relationship with America” and becoming famous for its political neutrality and luxury goods, said The New York Times. But Trump has singled out nations like Switzerland “he says treat Americans ‘unfairly’ by exporting more goods to the United States than they buy from it.”

Switzerland does have a high trade deficit with the U.S. — about $48 billion, according to the U.S. Census Bureau. Rather than this being a case of Switzerland treating the U.S. “unfairly,” the “reality may be more straightforward: Trump was keen to make big deals, and Switzerland just isn’t that big,” said BBC News. Trump wants to use tariffs to eliminate foreign trade deficits, but “balancing the deficit looks impossible. The population of Switzerland is just 9 million, and, bluntly, many of them don’t want to buy U.S. products.” The “gas guzzling cars are too big for Alpine roads, U.S. cheese and chocolate — well, let’s just say they’re not really to Swiss taste.”

Fear of being ‘annihilated’

There are tariff exemptions for Switzerland’s gold and pharmaceutical businesses, two areas the U.S. relies on the country most. But other businesses “are the main victims of Trump’s economically misguided focus on bilateral trade balances,” said The Economist. Half of “Switzerland’s overall trade surplus with the world is with America, because its specialties — pharma, gold, luxury items and high-end machinery — fit American demand,” so many believe high tariffs will negatively impact the Swiss economy. Switzerland may be able to make up some of its trade with the European Union, but “politically, being slighted by America hurts.”

Among the Swiss, the “surprise wasn’t that the U.S. took action,” said the Financial Times, but rather the amount of the tariff. Some are even blaming Switzerland itself for the situation. Switzerland “has a reputation for delivering on its commitments. But that can be a weakness in a world that rewards drama and ambition,” Hans-Peter Portmann, a Swiss banking executive and member of the country’s parliament, told the Financial Times. “That’s a problem when you’re up against Trump.”