The mistake is followed by the realization How Switzerland should have responded to the tariff hammer
39 percent on Swiss exports to the USA: Donald Trump's punitive tariffs hit pharmaceuticals, watches and mechanical engineering in particular. Economic expert Michael Bolliger sees strategic failures - and room for improvement.
No time? blue News summarizes for you
- After US President Donald Trump imposed 39 percent tariffs on Swiss goods, the stock market reaction remained moderate, although export-dependent Switzerland is severely affected.
- UBS expert Michael Bolliger sees the lack of room for negotiation and the lack of credible retaliation options as disadvantages for Switzerland compared to larger players such as the EU or China.
- He recommends more pragmatic strategies along the lines of other countries and expects tariffs to stabilize at a lower level in the medium term.
What went wrong? The press asked this question a week ago when US President Donald Trump imposed 39% tariffs on Swiss goods. It is often easy to blame others. But the real question is what we should have done differently.
The simplest answer to this question is obvious: President Karin Keller-Sutter should have negotiated better. However, this is not easy with a personality like Donald Trump.
Don't panic, the SMI remains stable, but ...
Michael Bolliger, Chief Investment Officer Switzerland at UBS, has a different explanation. "You're always smarter with hindsight. That also applies to US customs policy," Bolliger tells blue News. Although Switzerland was punished with high US tariffs on August 1, there was no vehement reaction on the stock market.
"The SMI ended the trading day down 0.2 percent. As a reminder, when President Trump announced the 'reciprocal' tariffs on April 2, the index lost almost 15 percent in the following days," Bolliger continues.
As an export-dependent economy, Switzerland is more exposed to US tariffs than many other countries and has a very high trade surplus in goods with the US. Bolliger says: "Pharmaceutical and gold exports are largely responsible for this, as are the machinery, luxury goods and watchmaking industries."
Switzerland is also at a disadvantage at the negotiating table. "Negotiations can be more difficult for a small country, partly because threats of retaliation are neither really credible nor effective." Measures such as the Chinese export restrictions on rare earths, which showed US arms and technology companies the vulnerability of their supply chains, are not possible for Switzerland.
Switzerland should have looked to its neighbors
"A healthy dose of pragmatism has not led to great, but more or less acceptable results elsewhere," says the expert. In the EU, competence over foreign direct investment or arms and energy imports lies with the member states and companies and not with the EU Commission. However, this has not prevented the Commission President from signaling far-reaching purchase and investment intentions.
Bolliger says: "We believe that Switzerland still has room for improvement in this area. Accordingly, we are confident that the US tariffs will ultimately settle at a lower level."
In summary, this means that Switzerland should have taken a leaf out of other countries' book. Did Switzerland underestimate the risk? This question remains unanswered. Now companies, politicians and ultimately the population will have to deal with Trump's tariffs.
