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The United States has reached an agreement with Switzerland to reduce tariffs on Swiss imports from 39% to 15%, in a deal that averts further economic strain for the European nation and secures substantial Swiss investments in American industries. The pact, finalised after intense negotiations, includes a commitment from Switzerland to invest $200 billion (£150bn) in the US by 2028, with a third of that amount earmarked for 2026. Officials from both sides hailed the arrangement as a win-win, though it highlights the broader tensions in global trade amid escalating tariff threats.
The tariffs, imposed in August, had severely impacted Swiss exports, with tech shipments to the US dropping 14.2% in the third quarter compared to the previous year, according to the Swiss Association of Mechanical and Electrical Engineering Industries. Industries such as watchmaking and luxury goods faced uncertainty, with companies warning of potential job cuts. The new 15% rate aligns Switzerland with the European Union, which secured a similar concession from the US earlier this year.
Under the terms, Switzerland will channel investments into key sectors, including pharmaceuticals, aviation, and rail manufacturing. Swiss plane maker Pilatus plans to establish a large plant in the US using steer-by-wire technology, while train manufacturer Stadler will expand operations in Utah. Gold refining is also included, leveraging Switzerland’s expertise in precious metals storage.
In return, Switzerland has agreed to eliminate tariffs on a quota of US meat exports, covering beef, bison, and poultry. The changes require approval from the Swiss parliament and a subsequent referendum to become binding, with implementation expected in the coming weeks.
Economic Implications and Reactions
For Switzerland, the deal represents “a great relief for our economy,” as stated by Economics Minister Guy Parmelin, who credited a decisive meeting between Swiss business leaders and US President Donald Trump. It addresses the dramatic export decline and stabilises industries vital to the Swiss GDP. US Trade Representative Jamieson Greer emphasised the job creation potential, noting the agreement “tears down longstanding trade barriers” and will bring thousands of new roles to American workers.
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The negotiations followed a “golden charm offensive” by Swiss executives, who presented Trump with symbolic gifts including a Rolex gold watch and an engraved gold bar—items now US property under ethics rules. Swiss chief trade negotiator Helene Budliger Artieda described the process as involving “very hard work.”
Broader implications include potential easing of transatlantic trade frictions, though experts warn of ripple effects from ongoing US tariff policies toward other nations. The International Monetary Fund has highlighted such measures as risks to global growth, projected at 3.2% for 2025. For the US, the influx of foreign investment could bolster manufacturing amid domestic economic slowdown signals.
Yves Bugmann, head of the Swiss Watch Industry Federation, welcomed the resolution after months of uncertainty. On social media, reactions ranged from relief among Swiss exporters to debates on the sustainability of tariff-based diplomacy.
As global trade dynamics shift—with similar deals eyed for other allies—this agreement may set a precedent for balancing protectionism with economic partnerships. Officials from both sides expect parliamentary processes to conclude swiftly, paving the way for implementation.
