Lutnick Targets Swiss Pharma Giants for Making Money Off America

(Bloomberg) — Commerce Secretary Howard Lutnick zeroed in on Switzerland’s flagship pharmaceutical industry, saying that the country is “so rich” because of its vast exports of drugs to the US.

“The Swiss like to say they’re a small country of only 9 million people — a small country, a rich country,” he said Friday in an interview on Bloomberg Television’s Surveillance. “And how did they become so rich? They sell us pharmaceuticals like it’s going out of style, right? They make so much money off America, that’s why they’re rich. So let’s hear what they have to say.”

Lutnick’s remarks come ahead of another meeting between US and Swiss officials after failed trade talks last month resulted in a 39% tariff rate for the European country. The US administration has repeatedly criticized Switzerland, which isn’t part of the European Union, for its large current account surplus.

The Swiss argue that the trade balance for goods is distorted by various factors including gold, which is only refined in Switzerland. Officials have also pointed to services, where the situation is reversed.

Lutnick damped hopes for a breakthrough for the meeting with Swiss Vice President Guy Parmelin, who has traveled to the US. “I am not optimistic.”

Pharmaceuticals are Switzerland’s biggest export sector and the country is home to Novartis AG and Roche Holding AG, which are among the biggest drug makers in the world. Roche Chairman Severin Schwan is helping the Swiss government to get a better trade deal.

So far, pharma has been exempted from tariffs — only as the US administration prepares a separate levy for drugs under a different legal authority — and Lutnick’s comments are the strongest public remarks yet with respect to that Swiss industry.

“Now you go to Switzerland, 9 million people,” he said. “I mean, what are they going to offer the American exporter, as compared to the size and scale by which they export and earn money off of us?”

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