Published by Global Banking & Finance Review®
Posted on August 3, 2025
4 min readLast updated: January 22, 2026
Add as preferred source on GoogleSwitzerland may revise its US trade offer as Trump imposes 39% tariffs, risking recession. Swiss officials aim for solutions before August 7.
By John Revill
ZURICH (Reuters) -The Swiss government is open to revising its offer to the United States in response to planned heavy tariffs, Business Minister Guy Parmelin said, as experts warned the 39% import duties announced by President Donald Trump could trigger a recession in Switzerland.
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 of tens of thousands of jobs being put at risk.
The country's cabinet will hold a special meeting on Monday to discuss its next steps, with Parmelin telling broadcaster RTS that the government would move quickly before the U.S. tariffs are imposed on August 7.
"We need to fully understand what happened, why the U.S. president made this decision. Once we have that on the table, we can decide how to proceed," Parmelin said.
"The timeline is tight, it may be hard to achieve something by the 7th, but we'll do everything we can to show goodwill and revise our offer," he added.
Parmelin said Trump was focused on the U.S. trade deficit with Switzerland, which stood at 38.5 billion Swiss francs ($48 billion) last year, with Switzerland buying U.S liquefied natural gas (LNG) among the options under consideration.
Another option could be further investments by Swiss companies in the United States, Switzerland's biggest export market for its pharmaceuticals, watches and machinery.
"Look at the European Union, they promised to buy LNG. Switzerland imports LNG too — maybe that’s one path," Parmelin said.
"Maybe more investments. But to be sure it's a strong enough basis for continuing talks, we have to fully understand what the U.S. expects."
Both Parmelin and Swiss President Karin Keller-Sutter were also ready to travel to Washington to pursue talks if necessary, he added.
Swiss officials 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 call was not a success, there was not a good outcome for Switzerland," a government source told Reuters. "But there was not a quarrel. Trump made it clear from the very beginning that he had a completely different point of view, that 10% tariffs were not enough.
"We are working hard to find a solution and are in contact with the American side," the source added. "We hope we can find a solution before August 7."
Tariffs would have a huge impact on Switzerland's export-orientated economy and raised the risk of a recession, said Hans Gersbach, an economist at ETH, a university in Zurich.
Swiss economic output would be reduced by 0.3% to 0.6% if the 39% tariff was imposed, a figure which could rise to above 0.7% if pharmaceuticals - which are currently not covered by the U.S. import duties - were included. Prolonged disruptions could shrink Swiss GDP by more 1%, Gersbach said.
"There would be a risk of a recession," Gersbach said.
Swiss shares are expected to be hit by the tariffs news when the stock market reopens on Monday after being closed during the Swiss National Day holiday on Friday.
The tariffs could also see the Swiss National Bank cut interest rates in September, said Nomura.
"We expect one more 25bp policy rate cut from the SNB in September, which would take the rate to -0.25%," the bank said.
"A hit to growth from U.S. tariffs on exports would likely weaken economic growth and cause further deflation pressures, adding to the likelihood of easing to a negative policy rate."
(Reporting by John Revill; Editing by Toby Chopra)
The tariffs are primarily focused on addressing the U.S. trade deficit with Switzerland, which stood at 38.5 billion Swiss francs last year.
Economists warn that the tariffs could reduce Swiss economic output by 0.3% to 0.6%, potentially leading to a recession.
The Swiss government is open to revising its offer to the U.S. and is considering further investments by Swiss companies in the U.S. as a potential solution.
The Swiss cabinet will hold a special meeting on Monday to discuss its next steps regarding the tariffs.
The tariffs could lead the Swiss National Bank to cut interest rates in September to counteract the economic impact.
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