Trump slaps 39% tariff on Switzerland after alleged 'disastrous' phone call with Swiss president

Swiss President and Head of the Federal Department of Finance Karin Keller-Sutter has been accused of mishandling an important phone call with the White House after United States President Donald Trump hit Switzerland with a 39 per cent tariff rate on Aug. 1.

Had a "disastrous" phone call with Trump

Local news outlet SWI swissinfo reported that on Jul. 31, Keller-Sutter supposedly had a "disastrous" 30-minute phone call with Trump, citing multiple people familiar with the situation.

The call concluded more than three months of trade talks and Swiss officials believed that they had secured a 10 per cent tariff on Swiss exports to the U.S.

However, Trump announced on Aug. 1 that Switzerland would face a 39 per cent tariff, which is even higher than the 31 per cent he previously declared on "Liberation Day" in April.

Keller-Sutter criticised by Swiss media

Following the announcement of the tariff rate, Keller-Sutter was roundly criticised by Swiss media outlets.

The tabloid Blick called Keller-Sutter "too naive", while 24 Heures stated that this was Keller-Sutter's "heaviest defeat of her political career", The Guardian reported.

Switzerland previously confident about securing 10% tariffs

SWI swissinfo said that Switzerland had previously expressed confidence in securing an early trade deal with the U.S. in April, partly because it was offering large-scale investment in the U.S.

Keller-Sutter also said in July that she had found "access to Trump", a perceived advantage over other countries who were struggling to secure meetings with U.S. officials.

Though the Swiss side was ready to agree to a tariff of 10 per cent, the U.S. side was not.

Citing a person familiar with the situation, SWI swissinfo said that the call on Jul. 31 did not go smoothly as "Trump made it clear 10 per cent was not enough and all he could focus on was Switzerland stealing money from the U.S."

Switzerland already eliminated all industrial tariffs

The final outcome left Swiss officials shocked as not only was it one of the highest rates globally, but it was also higher than the 31 per cent Trump announced in April.

The result of the Swiss-US trade talks is in stark contrast to most other countries, which saw reduced tariffs by Aug. 1.

Switzerland had already abolished all industrial tariffs, and the U.S. is a key market for Swiss products like watches, chocolate and machinery, SWI swissinfo reported.

Switzerland is also a huge investor in the U.S., with Nestlé, Roche and Novartis employing thousands of Americans.

Additionally, gold exports, which are a key factor in Switzerland's trade surplus with the U.S., along with pharmaceutical products, were exempt from Trump's "reciprocal tariffs".

One person close to the discussions stated that the Swiss had assumed that honest and reasonable offers would be enough in the talks, and were reluctant to make large commitments, unlike some other countries.

"The problem is the Swiss believe we have to make reasonable and honest offers. We are not good at international power politics."

Some blaming pharmaceutical sector

Some Swiss business leaders felt that the pharmaceutical sector was to be blamed for the failed trade talks with the U.S.

SWI swissinfo reported that Georges Kern, Breitling's chief executive, argued that the pharmaceutical sector had a tense relationship with Trump, particularly over drug pricing, and accused it derailing the trade talks.

Swiss pharmaceutical companies rely heavily on the U.S. market, sending around 60 per cent of their exports to the U.S. and investing billions.

However, some pharmaceutical companies including Novartis and Roche's U.S. subsidiary Genentech were recently pressured by the Trump administration to lower drug prices.

Switzerland hoping to improve offer to Trump

According to The Guardian, Switzerland's blue-chip stock market index fell 1.8 per cent on Aug. 4.

The Swiss cabinet held an emergency meeting and revealed in a statement that it would improve its offer to Trump.

It stated that Switzerland is "ready to present a more attractive offer, taking U.S. concerns into account and seeking to ease the current tariff situation".

Top photo via @keller_sutter/X