Switzerland wins US tariff rate cut to 15%, pledges $260b in investments
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Swiss industrial groups welcomed the deal, saying the 15 per cent rate - down from 39 per cent - would put them on a level playing field with EU competitors.
PHOTO: REUTERS
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- US will cut tariffs on Swiss goods to 15% from 39%, under a new trade agreement, USTR representative Jamieson Greer confirmed.
- The deal aims to shift Swiss manufacturing, including pharmaceuticals and railway equipment, to the US, according to Mr Greer.
- Swiss industries welcome the deal, expecting it to level the playing field with EU competitors and boost Swiss economic growth.
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ZURICH - The United States will slash its tariffs on goods from Switzerland to 15 per cent from a crippling 39 per cent under a new framework trade agreement that includes a pledge by Swiss companies to invest US$200 billion (S$260 billion) into the US by the end of 2028, the Swiss government said on Nov 14.
The announcement by Swiss Economy Minister Guy Parmelin brings the US tariff rate on Swiss goods in line with those from the European Union.
Mr Parmelin told a news conference that the tariff reduction would provide relief for about 40 per cent of Switzerland’s total exports.
US Trade Representative Jamieson Greer said earlier that the US “essentially reached a deal with Switzerland” and that the White House would announce details later on Nov 14.
In a statement, the Swiss government said the deal, which includes Liechtenstein, will reduce Swiss import duties on US industrial products, fish and seafood and agricultural products “that Switzerland considers non-sensitive.”
Switzerland will grant the US duty-free bilateral tariff quotas on 500 tons of beef, 1,000 tons of bison meat and 1,500 tons of poultry meat, the government said.
Mr Greer told CNBC the deal would involve Switzerland shifting “a lot of manufacturing here to the United States - pharmaceuticals, gold smelting, railway equipment. So we’re really excited about that deal and what that means for American manufacturing.”
Level playing field with EU
Swiss industrial groups welcomed the deal, saying it would put them on a level playing field with competitors from the European Union, which agreed to a 15 per cent tariff on EU exports to the US.
“For the industrial sector, which was subject to a 39 per cent tariff
“It’s a great relief on tariffs, but additional economic burdens and risks for Switzerland remain,” said Mr Hans Gersbach, a director of the KOF Swiss Economic Institute at ETH Zurich.
Switzerland’s machinery, precision instruments, watchmaking, and food sectors, which export to the US, would see the most relief, Mr Gersbach said.
KOF forecasts Swiss economic growth of 0.9 per cent in 2026, but this would exceed 1 per cent with the lower tariff rate, he added.
Ms Nadia Gharbi, an economist at Swiss bank Pictet, said the tariff reduction removed the main downside risks for the country’s economy and represents a clearly positive development for Swiss industries and for the overall growth outlook.
“Under the previous tariff regime, Switzerland suffered a significant loss of competitiveness – not only because of the strength of the Swiss franc, but also because neighbouring European economies were subject to tariffs of only around 15 per cent,” she said.
Swiss industry on Nov 14 reported a 14 per cent fall in exports to the US during the three months through September, technology industry association Swissmem said, while machine tool makers saw shipments slump 43 per cent. REUTERS
