Confusion and anger in Switzerland

39%? For Switzerland, it is a huge shock, and worse than the worst case – these are the highest prices in Europe.

Globally, the fourth higher, behind only Syria, Laos and Myanmar (although if President Trump follows his pricing threat by 50%, Brazil will jump at the top of the list).

This is the only story that dominates news and waves on Friday. A newspaper, Blick, described it as the greatest defeat in the country since the French victory in the Battle of Marignano in 1515.

Barely a few weeks ago, the government of Switzerland gave off confidence.

In May, a Swiss meeting facilitated the United States and China in Geneva, aimed at preventing a trade war between the two economic superpowers, allowed the president of Switzerland Karin Keller-Sutter to take a meeting with the American trade secretary Scott Bessent.

She came out smiling. He was told, she said that Switzerland was likely to be second on the list after the United Kingdom to conclude a trade agreement with Washington. 10%, she suggested, was the tempting price offer, much lower than the 31% that Donald Trump had unveiled for Switzerland during his “Liberation Day” in April.

Now these illusions are broken. A few hours before the first deadline in August, a last telephone call between Ms. Keller-Sutter and President Trump produced nothing. A few hours later, the news that prices would not be at 31% as initially threatened, but a punitive 39%.

For what? Some Swiss politicians already argue that Switzerland’s negotiation tactics were not up to par – but some say too hard, others say too obsequious. The reality may be simpler: Trump wanted to do big business, and Switzerland is simply not so big. It is not even clear how many discussions that Swiss commercial negotiators may have had with their American counterparts.

The point of collision, says the Swiss government, is now the trade deficit it has with the United States.

Trump sees trade deficits – when a country sells more in the United States it does not buy – as an intrinsically problem for the United States, although it is a view that is not widely shared by economists. He believes that prices can help protect the American manufacturing sector, which for decades has lost jobs because of companies abroad.

The Swiss trade deficit with the United States was $ 47.4 billion in 2024, although if the service industries are included, which Trump conveniently ignored, the deficit reduced to $ 22 billion. Switzerland sells more (mainly in pharmaceutical products, gold jewelry, watches and machine tools) in the United States that it buys.

To try to compensate for this, the Swiss government has reduced its own prices to the American industrial good, and several Swiss companies (Nestlé, Novartis) have promised investments of several billion dollars in American factories. Switzerland is already the 6th world investor in the United States, creating, the Swiss say 400,000 American jobs.

But balanced the deficit seems impossible. The population of Switzerland represents only 9 million and, thoroughly, many of them do not want to buy American products. Gas lawying cars are too large for alpine roads, cheese and American chocolate … Well, let’s just say that they are not really with a Swiss taste.

Jan atstslander, head of foreign trade in Economieuisse, who represents companies, told Swiss Broadcasting: “We need reliable relations with the United States.”

This could be a signal of frustration according to which one of the most important export markets in Switzerland adopted a market policy on / stop, stripping the Swiss affairs of the certainty it needs.

So what can Switzerland do now? There is a small window of opportunity, until August 7, when the prices should come into force. Until then, the Swiss government will truly try to negotiate. Swiss companies warn against thousands of job losses if the 39% cannot be reduced.

But it is difficult to see what the room for maneuver is.

With investment promises and zero prices, Switzerland had already offered everything it could. The only tactic now would be punitive – withdraw the investment offer, submit reciprocal prices and, the nuclear option, cancel the Swiss order for American F35 fighter planes.

Through Switzerland, there is confusion – and anger.

Friday is the Swiss national day, the equivalent of July 4. After making her traditional speech, the Swiss president Karin Keller-Sutter was questioned about the American rates.

She told journalists that talks with the United States went well, but for Donald Trump, the trade deficit was the obstacle. Inference was that the American president was the problem.

Instead of the usual patriotic celebrations, many Swiss believe that they are punished to have one of the most competitive and innovative countries in the world.

Others say that the country has already survived economic shocks and will be able to use this innovation to survive it.