Switzerland’s Rules-Based Diplomacy Clashes With Trump Dealmaking

Switzerland, which has long touted its diplomatic skills as a national selling point, is going to have to rethink some long-held principles if it wants to put its recent disastrous trade negotiations with Donald Trump in the past.

The outcome of those talks was a 39% tariff rate, the highest of any developed nation, threatening businesses and the economy. Not only that, the US has also reneged on a previously negotiated price for an order of F-35 fighter planes.

Swiss officials are working to remedy the tariff situation, and have made a new offer to the US to get better trade terms. 

But rattled by Washington, the government said Wednesday it’s also intensifying efforts to make the country more attractive for businesses to deter them from relocating production. Chocolate producer Lindt & Spruengli AG and Swiss army knife maker Victorinox AG are among firms considering such actions. 

The recent setbacks with the US have come as a surprise to the country’s leaders, who operate on the idea that in politics, you can’t go back on your word. That clashes with the Trump approach, which has elevated unreliability as a negotiating tactic. It’s something other international leaders have noticed, and Switzerland may need to follow their lead.

“Swiss politics have a long tradition of acting within written or unwritten norms, that’s deeply anchored,” said Georg Lutz, a professor of Swiss politics in Lausanne. “That’s why the government has been acting this way with Trump — and why it’s struggling at the moment.”

In a country where rental contracts stipulate that laundry can’t be hung out on Sundays, the Swiss government’s adherence to rules reflects standards held high by its voters.

After the tariff shock, the country’s executive has gone into quiet mode. There are no updates on the new negotiations, and leaders have avoided the topic at press conferences.

“I can simply tell you that the Federal Council remains fully committed to improving the tariff situation,” chief government spokesperson Nicole Lamon told reporters on Wednesday. “Discussions are currently ongoing at various levels.”

That’s a change from earlier this year, when ministers proudly promoted their progress with the US. They claimed they would get preferential treatment, only to find that idea upended at the last minute by Trump.

“I always hesitate to underestimate Swiss diplomats, but this time they clearly got it wrong,” said Joost Pauwelyn, co-director of the Geneva Graduate Institute’s Centre for Trade and Economic Integration.

Among officials in Bern, the view is that the 39% tariff isn’t sustainable in the long run because it pushes up prices for American consumers. This is fueling hope that the levy will be reduced, although people familiar with talks in Washington expect it will take at least several weeks to reach an agreement.

The end of October is seen as a possible time frame for a better deal, based on comments from Treasury Secretary Scott Bessent that the US wants to wrap up negotiations with all countries who didn’t get an accord yet by then.

But much depends on how much President Karin Keller-Sutter is willing to deviate from the past Swiss playbook. On the very day she returned empty-handed from Washington she said that “we will not make promises we cannot keep.”

There have been suggestions of a charm offensive, bringing in figures like FIFA President Gianni Infantino, tennis legend Roger Federer or presenting the US president with a gold Swiss watch.

While the 39% levy is a burden, the economy would take a far bigger hit if Trump puts levies on pharmaceuticals, a key export product for Switzerland.

According to Jacob Funk Kirkegaard, a senior fellow at the Bruegel think tank, Switzerland’s options are limited without some clarity.

“I can see why Swiss politicians are wary about going out on a limb that could potentially be very unpopular in Switzerland, and only for Trump to completely upend that with pharma tariffs,” he said.

Meanwhile, Swiss businesses are demanding measures to soften the blow from the tariffs. 

The government’s action plan on Wednesday includes measures to cut red tape and reduce costs, as well as a push to foster access to markets other than the US. 

This chimes with calls from politicians for Switzerland to reduce dependency on the US and look more to the European Union, its biggest trading partner.

“We should strengthen cooperation with the EU,” said Franziska Ryser, a lawmaker for the Greens. “At least under the Trump administration, America is no longer a reliable partner.”

With assistance from Dylan Griffiths.

This article was generated from an automated news agency feed without modifications to text.