Reports have emerged that U.S. President Donald Trump imposed a 39% high 'reciprocal tariff' on Swiss imports because he judged that the Swiss president did not show sincerity in resolving the trade balance during a currency exchange.
According to Bloomberg News, the two presidents had a phone call on July 31 at 8 p.m. Swiss local time (2 p.m. U.S. Eastern Time). This was just about 10 hours before the trade agreement deadline set by President Trump. Initially, the tariff was set to be 31%, but after the call, President Trump announced that a 39% reciprocal tariff would be applied starting August 7.
According to Swiss government officials, President Trump focused on the annual $40 billion surplus of Swiss goods to the U.S., claiming that Switzerland was akin to stealing money from America. However, when Swiss President Keller-Juter made no significant proposals, President Trump became furious and decided to raise the tariff.
Swiss officials did not expect this at all. Swiss staff, U.S. Treasury Secretary Scott Bessent, and U.S. Trade Representative (USTR) Jamieson Greer had already prepared a draft of the trade agreement in early July, and the Swiss government approved it on July 4. Therefore, it is reported that President Trump's final approval was seen as a mere formal procedure. However, Bloomberg stated, 'Switzerland realized through the last-minute call with Trump that no agreement would be final without the U.S. president's direct approval.'
During a Newsmax interview on the 1st, President Trump did not mention the Swiss president directly, unlike Chairman Powell, but in a post on Truth Social, he claimed, 'She (Kugler) resigned because she knew he (Powell) was acting incorrectly in monetary policy decisions. He should resign too,' continuing the sentiments expressed in the currency exchange.
President Keller-Juter countered President Trump's claims the following day, August 1, calling them 'nonsense.' While he did not rule out the possibility of visiting Washington, D.C., to negotiate before the tariff takes effect on August 7, he stated, 'Both sides need to narrow their positions.'
The White House has not made an official comment regarding the reports, but a source who requested anonymity said, 'The president took direct action because Switzerland did not make meaningful concessions regarding trade barriers,' adding, 'Wealthy countries should not expect agreements without concessions on key items.'
As a result, the pharmaceutical industry, which accounts for about 60% of Swiss exports, is expected to take a direct hit. Particularly, as the Trump administration strongly demands lower drug prices, the combination of tariffs and policy pressure puts the Swiss pharmaceutical industry in a double bind. The initial draft agreement included tariff exemptions for Swiss pharmaceutical exports to the U.S.; however, Jamieson Greer denied this in a Bloomberg TV interview. He stated, 'We will now impose tariffs on pharmaceuticals and encourage production within the U.S.'
He added, 'The exchange of all documents is not an agreement. Nothing is confirmed until an agreement is reached.'
The Swiss luxury goods industry is also set to take a hit. According to the Associated Press, the Swiss watch industry federation stated, 'We are very disappointed and shocked by the U.S. decision regarding the 39% tariff.' Though President Trump and his family, as well as his close associates, have worn Swiss luxury watches, high-end watch distributors expect retail prices in the U.S. to increase by about 12% to 14% as a result of this measure.
Events featuring luxury brands, such as high-end watch fairs showcasing pieces from the Swiss brand IWC, will also be unable to escape the repercussions of this decision.