Switzerland’s government will hold an extraordinary cabinet meeting on Monday to discuss its response to President Donald Trump‘s 39% tariff on Swiss imports, which threatens to inflict heavy damage to its US-dependent luxury goods industry.
Switzerland was left stunned on Friday after Trump hit the country with one of the highest tariffs in his global trade reset, with industry associations warning that tens of thousands of jobs were at risk.

The duties are scheduled to go into effect on Thursday, giving Switzerland a small window to strike a better deal.  

Industry leaders and politicians were struggling to understand why the country was singled out – the EU, Japan and South Korea, for example, face 15% levies – but Switzerland had a 38.5 billion Swiss franc (48 billion dollar) trade surplus with the United States last year. 

Swiss President Karin Keller-Sutter told Reuters on Friday that Switzerland had given US goods virtually free access to its market, and Swiss companies had made very important direct investments in the US.

“The president (Trump) is really focused on the trade deficit, because he thinks that this is a loss for the United States, that every year with Swiss exports, the United States loses, well, 38.5 billion (francs),” she told Reuters. Further measures would have to be discussed by the full Swiss cabinet, she said.

“I’m not ready to make an offer today. I think we have to discuss that in government,” Keller-Sutter said.

Swiss officials have rejected reports that the higher than expected tariffs were imposed after a bad-tempered telephone call between Keller-Sutter and Trump late on Thursday.

The government is open to revising its offer to the United States in response to the tariff rate, which is due to go into effect on August 7, Business Minister Guy Parmelin said on Sunday. He said options included Switzerland buying US liquefied natural gas or further investments by Swiss companies in the United States, its biggest export market for pharmaceuticals, watches and machinery.

An index of Swiss blue-chip stocks hit its lowest level since mid-April on Monday, as shares in banks, luxury retailers and pharma companies tumbled. The SMI index was last down 0.6% on the day, compared with a 0.6% rise in the regional STOXX 600 index.       

In Zurich, shares in high-end watchmakers such as Richemont and Swatch fell in volatile trading. Richemont stock was last down 0.8%, having dropped as much as 3.5% earlier, while Swatch shares were down 0.7%, having fallen by as much as 5%. Possible US tariffs on pharmaceutical imports are being considered separately. On Monday, the Swiss franc was the worst-performing major currency against the dollar, which was last up 0.7% at 0.809 francs, not far off Friday’s one-month highs.