Switzerland’s exports to the US retreated in October amid ongoing volatility in their trade relationship before a deal last week to lower President Donald Trump’s 39% tariffs. 

Foreign sales to America excluding gold, adjusted for seasonal swings, were 5.5% lower than in September, the country’s customs office said on Thursday. The total of Swiss shipments decreased by 0.3%.

Meanwhile imports from the world’s biggest economy rose 0.6%. That means the US trade deficit with the nation narrowed to 3.1 billion francs ($3.8 billion), from 3.3 billion francs the previous month. 

Prospects for Swiss transatlantic trade are set to improve after an agreement on Friday to cut US levies to 15% in return for a $200 billion investment pledge. The accord roughly halves the expected hit to exports going to America, according to Bloomberg Economics.

The funds going to America will fully come from the private sector, chief negotiator Helene Budliger Artieda told Bloomberg Television on Wednesday. So far, the deal is only a joint declaration, and both sides are now hammering out the details, she said.

While the agreement brings relief, surcharges remain — also at the reduced level — higher than before the begin of Trump’s tariff campaign. That’s evident in Swiss watch exports to the US, which in October were 47% lower than a year earlier. They also showed signs of re-routing, as sales to China grew for a second month.

Swiss watch manufacturers, along with those of machines and precision instruments, were hit hardest by the highest rate the Trump administration inflicted on any developed nation, according to Switzerland’s central bank.

Other key exports like medicines and gold were and remain exempt from levies under the different regimes the US applies. Gold exports to America fell to 0.9 tons in October from 4.2 tons amid ongoing strong volatility. Overall, Swiss bullion shipments fell 11%, led by a decline of sales to China.

Overall, only about 4% of Swiss sales abroad were affected by the 39% surcharge, the SNB has said. Still, the outsized tariff was enough to hand Switzerland the first quarter of contraction in two years, with a 0.5% output drop coming in much worse than the slight dip economists had expected.

After the deal that was announced, economists lifted forecasts for future growth, and a snapback now looks feasible.