Switzerland’s 15% US Tariff Deal to Apply Retroactively

(Bloomberg) — Switzerland’s agreement last month to get the US to lower tariffs on the country will be backdated to take effect on the day the deal was announced.

The reduction will cut the levy to 15% from a previous level of 39%, a punitive rate that was the highest slapped on any developed country. Switzerland’s government announced the retroactive implementation — applying from Nov. 14 — in a statement Wednesday.

President Donald Trump’s surcharge decision this summer had dealt a severe blow to the export-focused economy. After months of negotiations between officials, it was a high-profile intervention by a group of Swiss billionaires — who visited Trump in the Oval Office — that made the president agree to cut the levies in return for a $200 billion investment pledge from Swiss businesses.

Until Wednesday’s announcement, it was unclear from when the reduction would take effect.

Addressing reporters in Bern, Economy Minister Guy Parmelin said that Switzerland secured the backdated implementation solely by agreeing to apply its own tariff reductions also from the day of the deal.

“We didn’t give anything special, there were no further concessions to obtain the retroactive application,” he said.

The Swiss part of the deal includes cutting levies on fish, seafood and agricultural products that don’t grow locally, like certain nuts and tobacco products. They also granted the US import quotas for some meats.

Swiss business lobby economiesuisse called the lower tariffs a long-awaited relief because the surcharges posed an existential thread for some companies.

“Thanks to the US deal, thousands of jobs in Switzerland can be saved,” Luc Schnurrenberger, the organization’s deputy head of foreign trade, said in an email to Bloomberg.

As the trade deal between the two countries is a preliminary agreement, the lower rate that’s taking effect still hinges on the outcome of Swiss-US talks to finalize the details. Those conversations are ongoing, with both sides aiming to conclude them within the first quarter, according to a joint statement posted on the White House website.

(Updates with comment from minister from fifth paragraph.)

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