The United States and Switzerland are close to finalizing a trade agreement that would reduce the 39% tariffs President Donald Trump imposed on Swiss goods in August, in what could mark one of Washington’s most significant bilateral trade revisions this year.
Speaking from the Oval Office on Monday, President Trump confirmed ongoing negotiations, saying White House officials were “working on a deal to get the tariffs a little lower.”
“I haven’t set any number, but we’re going to be working on something to help Switzerland,” Trump said. “We hit Switzerland very hard. But we want Switzerland to remain successful,” he added, describing the Alpine nation as “a very good ally.”
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According to reports from Bloomberg and other outlets citing sources familiar with the talks, the tariff rate could be cut to 15%, aligning with the level applied to European Union exports to the U.S. The deal, sources said, could be concluded within weeks if both sides finalize terms on a narrow set of industrial and luxury goods.
Swiss reaction and economic implications
In Bern, officials welcomed the prospect of a tariff reduction but declined to comment on specifics. “We are not commenting on the ongoing discussions,” a spokesperson for Switzerland’s Economy Ministry told CNBC. The spokesperson confirmed that Economy Minister Guy Parmelin “is in regular contact with the relevant authorities in the U.S., including USTR Jamieson Greer.”
The tariff, introduced by Trump in what he described as a move to address trade imbalances, has been deeply unpopular in Switzerland, where export-dependent sectors form the backbone of the economy. The 39% duty hit key industries including watches, jewelry, precision machinery, chocolate, electronics, and pharmaceuticals — many of which rely heavily on the U.S. market.
On Tuesday, shares of major Swiss firms Swatch Group and Richemont — two of the world’s largest luxury watchmakers — rose in early trading, buoyed by expectations of a partial rollback.
Industry executives have been vocal about the tariffs’ toll. The CEO of Breitling, one of Switzerland’s leading watch brands, told CNBC earlier this year that the duty was “horrible” for the sector and risked making high-end Swiss goods less competitive globally.
The Swiss tariffs were among the steepest levied under Trump’s sweeping tariff agenda this year, which has targeted multiple countries as part of his broader campaign to reduce U.S. trade deficits.
The Office of the U.S. Trade Representative (USTR) reported a $38.5 billion goods trade deficit with Switzerland last year. However, Swiss authorities pushed back on the notion of imbalance, arguing that the overall trade relationship is relatively even when services are included.
“The U.S. has a surplus of services exports and Switzerland does for goods exports,” the Swiss government said in August. It added that Switzerland’s trade surplus “is not rooted in unfair trade practices” and that over 99% of U.S. goods are imported into the country without tariffs.
Switzerland, though small, is a major investor in the U.S., particularly in pharmaceuticals and finance. American companies such as Johnson & Johnson, Microsoft, and Google also maintain large operations in Switzerland due to its favorable tax and regulatory environment.
A pragmatic recalibration
Analysts see the potential tariff cut as part of Trump’s ongoing recalibration of his “America First” trade policy. After years of using tariffs as leverage in trade disputes, the administration has shown a willingness to renegotiate when domestic industry or allied relations are at stake.
The new trade terms, if finalized, are expected to stabilize transatlantic relations that have been strained by recent tariff actions, while easing pressure on Swiss manufacturers facing declining margins and disrupted supply chains.
For Trump, the timing may also be politically significant. A new trade deal that boosts American access to European markets without compromising his hardline image on trade could be presented as both a policy win and a gesture of goodwill toward a long-standing ally.
While negotiations are still underway, voices in Washington suggest an announcement could come before the end of the month.