The Week in Switzerland
Dear Swiss Abroad,
The long-awaited announcement from the business world finally arrived this week: Donald Trump unveiled the new tariffs that will apply to various countries. For Switzerland, the news is a serious blow.
This week’s headlines also brought fresh figures on poverty in Switzerland and saw the return of a longstanding point of contention: GMOs in agriculture.
Enjoy the reading!
On Wednesday, US President Donald Trump announced a round of import tariffs on various countries. Switzerland is among the hardest hit.
Swiss products imported into the US will now face a tariff of 31% – higher than the European Union’s 20%, but slightly below China’s 34%. These new tariffs come into effect on April 5 and 9.
This steep rate doesn’t come as a total surprise. Switzerland was already on the so-called “Dirty 15” list – countries whose exports to the US significantly exceed their imports. The 31% figure stems from a simple formula: dividing the bilateral trade deficit by the value of imports from that country. “Taking the examples of Japan, the EU, Switzerland and Vietnam, we confirmed that the figure results from this calculation,” reported Le Monde.
As the seventh-largest investor in the US – and the leading one in new technologies – Switzerland had hoped for more lenient treatment. A delegation from the State Secretariat for Economic Affairs (SECO) even travelled to Washington recently to make the case. It appears their efforts were in vain.
Several key Swiss industries, such as watchmaking, chocolate and machinery, expect significant losses. The business federation Economiesuisse described the move as a “major blow” to Switzerland’s export sector. Swissmem, the umbrella body for the tech industry, called the tariffs a “severe blow”.
The Swiss government responded by saying it “takes note” of the decision. At a press conference on Thursday, it announced it would not take retaliatory measures for the time being and would instead pursue diplomatic dialogue.
Washington often criticises Switzerland for its heavily subsidised farming and resistance to US-produced GMOs. Coincidentally or not, this week the Swiss government presented a draft law paving the way for the use of new genetic technologies in Swiss agriculture.
The proposed legislation would regulate the use of gene-editing techniques to develop more climate-resistant crops, while helping reduce pesticide use. “Animals are not affected,” Environment Minister Albert Rösti clarified. He also stressed that conventional crops would remain separate from modified ones both in the field and after harvest.
The Swiss government argues that these newer techniques are more precise and less risky than older methods. GMOs have been banned in Switzerland since 2005, with the moratorium now extended until 2030. The draft law will now enter the consultation phase.
The Federal Statistical Office (FSO) released its 2023 income and living conditions survey on Monday, showing that 8.1% of the Swiss population – around 708,000 people – live below the poverty line. The rate remains largely unchanged from the previous year.
In 2023, the poverty threshold was set at CHF2,315 ($2,690) per month for a single person and CHF4,051 for a couple with two children. The survey revealed that 10.1% of people in Switzerland struggle to make ends meet, 11.1% cannot afford to replace worn-out furniture, and 18.8% would be unable to cover an unexpected expense of CHF2,500.
Those most affected include single parents, people living alone, individuals with no post-compulsory education, the unemployed and foreign nationals.
Nonetheless, Switzerland still boasts one of the highest living standards in Europe. Only Luxembourg, Norway and Austria have higher median disposable incomes. Encouragingly, nearly one-third of respondents said they were “very satisfied” with their household’s financial situation.
Amid tension with the US, Switzerland made a step forward in its relationship with Europe. On Wednesday, Switzerland and the EU signed an agreement on Swiss participation in EU research and education programmes, notably Horizon and Erasmus.
“This is an important step in strengthening cooperation between the EU and Switzerland,” said the European Commission. While the agreement won’t formally enter into force until the full package of bilateral accords is ratified, provisional participation in these programmes is now possible.
Switzerland was previously excluded from such schemes after the collapse of talks on an institutional framework agreement in 2021.
The week ahead
After the shock of Trump’s tariff announcement, the upcoming week may seem quieter by comparison. Still, there are key dates on the economic calendar, notably FINMA’s annual press conference on Tuesday. That same day, Zürcher Kantonalbank will release a study on the Swiss property market.
The cultural calendar is livelier, with the 59th Montreux Jazz Festival programme announcement due on Thursday, and the awards ceremony for the Visions du Réel documentary film festival taking place on Friday.
A few quirky events are also on the radar: Saturday sees Martigny hosting the “World’s Biggest Raclette”, while the Geneva International Exhibition of Inventions opens on Wednesday.
Translated from French using DeepL/amva
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