Swiss President Arrives in Washington Attempting to Sway Trump

(Bloomberg) — Swiss President Karin Keller-Sutter arrived in Washington to make a last-minute bid for a deal to lower the 39% tariff imposed last week by Donald Trump.

The trip is to “facilitate meetings with the US authorities at short notice and hold talks,” the government said in a statement. Underscoring the pressure the Swiss president is under at home, she is flying to DC without a formal invite from the White House to meet with Trump, according to a person familiar with the matter.

Her office declined to comment on whom she plans to meet and what trade concessions she might bring before Thursday’s deadline to implement the levy. In an interview with CNBC that hinted at the challenge Keller-Sutter faces, Trump spoke about the last time they talked together in a call last week.

“The woman was nice, but she didn’t want to listen,” he said, highlighting the size of the US trade deficit with Switzerland. The country makes “a fortune” from pharmaceuticals, and tariffs on drugs will follow within the “next week or so,” he added.

Trump’s levy last week stunned the Swiss after talks that they thought looked promising. If the 39% tariff rate came into effect across the board — including on pharmaceuticals — that would put up to 1% of Switzerland’s economic output at risk over the medium term, according to Bloomberg Economics.

The paradox faced by Keller-Sutter and her Economy Minister, Guy Parmelin, is that any concessions may be politically costly without meaningfully curbing the trade deficit with the Swiss that Trump has criticized.

“Switzerland has to get creative,” said Stefan Legge, a trade policy researcher at St Gallen University.

The Swiss government plane landed at Washington’s Dulles International Airport just before 3 p.m. local time, according to the ADS-B Exchange flight-tracking service. Keller-Sutter’s office didn’t disclose an agenda for Tuesday night.

Her shuttle diplomacy follows an emergency government meeting on Monday where ministers agreed to present a new offer to the US. Gold, agriculture, planes, drugs, and energy are just some areas that may feature in any talks. Here’s an overview of some concessions the Swiss could make.

Agricultural Tariffs

Switzerland abolished industrial tariffs in 2023, leaving levies on only 5% of its imports. The only area where the Swiss maintain tariffs is agriculture, motivated by a politically charged belief in self-reliance. Any concessions would surely infuriate farmers, who have previously pledged to “vehemently fight” any changes to the current regime.

While the political pain would be large, the win for Trump would be rather symbolic since agriculture amounts to a small fraction of the economy.

Gold

Trump’s aides claim that the US’s out-sized trade deficit with Switzerland is why the president imposed such high levies. In the first quarter, two thirds of the gap was due to shipments of bullion. That’s because of the price of the metal itself rather than any added value by Swiss refineries, which largely focus on resizing bars.

“Gold is special,” said Simon J. Evenett of IMD Business School in Lausanne. “It isn’t really manufactured in Switzerland. Processed is a better word.”

One fix could be a high tariff, say of 50%, just on gold, hitting refineries but with a limited wider economic fallout. Alternatively, handing over buillon trade to the central bank or another state institution could provide a justification for taking it out of statistics on both sides of the Atlantic. But it’s not clear if this would appease Trump.

Planes

Switzerland is currently buying 36 F-35 fighter jets from Lockheed Martin Corp. for its air force, but has run into disagreements over the price.

According to the Swiss, a fixed price of 6 billion francs ($7.4 billion) was contractually agreed, which voters backed in a plebiscite, but the US now wants as much as $1.3 billion more to account for higher production costs and inflation.

Accepting the higher charge, and possibly symbolically ordering one or two more planes, could help convince Trump, given how arms purchases featured in his other trade deals. But voters might balk at that.

Drugs, Investments and Energy

One of Trump’s bugbears is over pharmaceuticals, where Switzerland specializes.

Novartis AG and Roche Holding AG have already announced plans to invest huge sums in the US over the next few years, and the Swiss government could pressure them to cut prices there too. While that might align with the interests of the companies themselves to get out of Trump’s crosshairs, officials can’t actually force them to do so.

An easier approach could be to gather pledges for US investments by Swiss companies. Such a package could be combined with a pledge to buy US energy, in particular liquefied natural gas. While the landlocked country is focused on hydroelectric and nuclear power, it does use a small amount of gas, primarily in the winter.

“We could buy oil, arms and LNG and we could give concessions on agriculture and at least give our best endeavor to put pressure on Swiss pharmaceutical companies to lower prices,” said Thomas Borer, a former Swiss diplomat.

Something Else

Switzerland’s rude awakening in its diplomacy with Washington has forced officials to realize that winning over Trump himself is key, rather than talking to underlings.

So perhaps a gesture such as a present to charm the president could do the trick, said St Gallen’s Legge. He cited the example of the birth certificate of Trump’s German grandfather that Chancellor Friedrich Merz brought him in June.

“Maybe it would be best to give him a golden Swiss watch,” Legge said.

–With assistance from Hugo Miller, Dylan Griffiths, Jan-Henrik Förster, Annmarie Hordern and Benedikt Kammel.

(Updates with arrival in Washington starting in first paragraph)

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