Swiss Liberals: Instead of Retaliation Against the U.S., We Will Expand the Market to Other Parts of the World
Switzerland is known for its liberal economic tradition and has never imposed high tariffs on imports, except for a handful of specific agricultural products. Since the start of 2024, Switzerland has completely abolished tariffs on imports of industrial goods (which account for about 99% of total imports), while tariffs on agricultural imports have remained the same (an average of 30 percent).
The abolition of tariffs has been a complete success for domestic production, especially for sectors that use imported raw materials and intermediate goods, giving a major boost to exports. This has also resulted in a growing U.S. trade deficit in goods with Switzerland, while in services the U.S. has a surplus. In just the first three months of this year, the U.S. trade deficit in goods with Switzerland reached $54.3 billion, the third-largest U.S. deficit in that period.
President Trump, for whom the trade deficit is the biggest “enemy,” did not like this one bit. He decided to punish Switzerland with a massive universal tariff rate of 39 percent on almost all imported goods from Switzerland.
For the Swiss economy, this is a major problem. The multi-party government is searching for solutions, while many business leaders and media outlets are already panicking.
The Liberal FDP party issued a press release calling the situation serious but concluding that “there is no need to panic,” and urged the federal government to take concrete action.
“Talks with the U.S. must continue. As the sixth-largest investor in the United States, Switzerland still has strong arguments. But we cannot rely on dependability. With this U.S. administration, there will be no predictability. Protecting our interests is our top priority.
Switzerland must reduce its dependence on the U.S. To achieve this, it must develop new sales markets: swiftly concluding free trade agreements with the Mercosur countries and India, as well as further developing existing agreements—such as those with China and Japan—must be addressed immediately.
In a turbulent world, reliability and stability are our most important assets. A previously solid national budget, reliable and predictable institutions, and dependable companies with dedicated and well-trained employees form the backbone of this country. We must preserve and strengthen these pillars.”
The FDP, as the third-strongest political force in the country, is also calling for unity because “at this moment, there is no room for partisan interests.” They call for abandoning the Social Democrats’ and Greens’ proposal to increase contributions for senior citizens’ insurance, arguing that such an extra burden would harm taxpayers. They also demand that the ruling SVP drop its planned termination of bilateral agreements with the European Union:
“In the midst of a global crisis, this is extremely dangerous. Switzerland must not isolate itself.”
They also call for abandoning any attempt at revenge against the U.S. in the form of retaliatory tariffs. Instead, they urge the continuation of negotiations to achieve a more favorable agreement:
“The call for retaliation against the U.S. is a natural reflex, but retaliation would backfire economically. Intermediate goods for our industry would become more expensive, and consumer prices would rise. Switzerland would simply be shooting itself in the foot.”
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