‘We will manage to avoid 39% tariffs’, says Swiss-US business leader

The United States plans to impose 39% tariffs on Swiss imports as early as Thursday. Rahul Sahgal, CEO of the Swiss-American Chamber of Commerce, is optimistic that a deal can be reached before then.

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He spoke to Swiss Public Radio SRF following the August 1 announcement of the US tariff rate on Switzerland, which followed discussions between the two countries’ leaders over lower rates.

SRF: How surprising was the tariff decision for you, Rahul Sahgal?

Rahul Sahgal: It came as quite a surprise, because we thought that a final meeting between [Swiss] President Karin Keller-Sutter and [US President] Donald Trump would serve to get the deal over the finish line, so to speak, and not to call the whole thing into question.

SRF: President Keller-Sutter spoke to Trump personally on the phone. There were contacts at the ministerial level, there were positive signals. Switzerland thought it was in a good position. Why this high tariff after all?

We don’t know exactly. At the moment, Donald Trump is saying that the US has a trade deficit of $40 billion [with Switzerland] and that’s simply too big. But that’s nothing new, his negotiators have known that for a long time. And that’s where the big question marks are: Switzerland has negotiated very well and very thoughtfully with the top officials in the US administration over the last three months. And what we negotiated with them had their backing. In other words, the only open component was Donald Trump. The argument with the $40 billion (CHF32 billion) was surprising. I find what happened there a little questionable.

SRF: Despite everything, is an agreement still possible at the last minute?

I strongly believe that we will manage to avoid having 39% [tariffs on Swiss exports]. I think the approach now is for us to regroup and consider what the best strategy is. And then we have to see whether we can manage to have something in place before August 7 that might bring us down from 39%. Otherwise, this executive order also leaves the door open to bringing the tariff down if something is negotiated at a later date.

Even if every Swiss person drank a bottle of bourbon a day, ate a steak and bought a Harley-Davidson, the trade deficit would not change significantly.

– Rahul Sahgal, Swiss-American Chamber of Commerce

SRF: Does Switzerland still have any trump cards that it can play against Trump?

For me, the question is: what does Trump want? These $40 billion [in trade deficit] are there. But you can take them apart; gold has a very high share there. The fact that the US has 340 million people and we have 9 million doesn’t go away. Even if every Swiss person drank a bottle of bourbon a day, ate a steak and bought a Harley-Davidson, the trade deficit would not change significantly.

In other words, you have to see what else you can do. For me, these $40 billion raise the question: why is [Trump] only looking at this in Switzerland? Japan or the EU have much larger trade deficits in goods. Switzerland imports 14 times more goods per capita from the US than it does from us. If you also include trade in services, trade [between the countries] is balanced. Trump probably knows all this. But apparently that’s not enough for him.

More on Swiss-US tariff negotiations:

+ Trump tariff shock: how Switzerland is positioning itself

+ Swiss president should have met Trump in Scotland, says ex-diplomat

+ Swiss minister: Bern to re-work its ‘offer’ after US tariff blow

Translated from German by Veronica De Vore/jdp