Switzerland–United States: Customs duties from 39 to 15 %

 Bern and Washington are reportedly close to a compromise lowering to 15 % US tariffs targeting Swiss exports, following the devastating blow of 39 % imposed in August. An agreement could be reached "within two weeks", but nothing is yet finalized.

Source Bloomberg

The essentials

• Objective of the deal : bring the US tariff back to 15 %, which is the level applied to the EU.
• State of discussions negotiations are advanced, but could fail until the signing.
• American position The White House says it is working to "lower" the fees a little, without confirming a figure.
• Market reaction : SMI +1 % In the morning in Zurich; the franc strengthens against the dollar and the euro.
• Context : the lifting at 39 % aimed to correct a US deficit of ~40 billion $ on goods; Bern counters with the positive balance of services.

The news will please the’economy of the canton of Neuchâtel which is heavily dependent on trade with the USA.

How did we get here?

The July attempt had failed and, the August 1st, On Independence Day, Washington announced a tariff record for a developed country. Since then, the head of Swiss foreign trade Helene Budliger Artieda multiplies trips back and forth to Washington, supported by a offensive by major Swiss groups.

The decisive push

The momentum accelerated after a meeting at the White House bringing together several Swiss business leaders and investors — notably Johann Rupert (Richemont) And Alfred Gantner (Partners Group). Following this meeting, the American Trade Representative Jamieson Greer has intensified talks with the Swiss side.

Markets and businesses

The hope of an agreement has boosted the SMI (+1 % around 10:45 in Zurich), with marked increases at Richemont, Lonza And Partners Group. THE franc strengthened against the dollar and the’euro.

Macro issues for Switzerland

• Growth the economy would have moved back to T3, according to preliminary signals.
• National Bank : there BNS judges the prospects degraded through the increase in American duties.
• Job : THE unemployment rises, to a high of four years (from a low point, however).

And now ?

A price at 15 % would be a relief major for the Swiss export industry and would bring trade relations back to the European level. But uncertainty remains as long as the agreement is not formalized and signed by both sides.