US tariffs? ‘Keep cool,’ suggests former WTO ambassador

US duties? 'Chill out,' suggests former WTO ambassador Keystone-SDA

Robust Swiss companies should avoid reacting too quickly to the 39% customs duties imposed by Washington, says Didier Chambovey, Switzerland’s former ambassador to the World Trade Organization.

He believes patience is the wiser strategy until the current trade negotiations are concluded.

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“For companies that have their shoulders broad enough to withstand the current situation, I would advise not to react hastily to the duties,” says the 64-year-old in an interview published by L’Agefi. “In fact, it is not excluded that an agreement on a lower rate could be reached and I sincerely hope that the current discussions will have a positive outcome.”

“It is also necessary to be well acquainted with the new US customs regime, which has become very complex,” the Valais diplomat continued. “This applies in particular to rules of origin. Companies that do not have the necessary resources can turn to specialised brokers or entities such as Switzerland Global Enterprise. Furthermore, companies would do well to take geopolitical and geo-economic factors into account in their planning and strategy. Depending on the circumstances, it might be appropriate to call on specific expertise,’ he says.

“Finally, diversification remains the best defence,” says the expert. “Markets must be multiplied in order to reduce dependencies, both in terms of outlets and supply. The pandemic, which has shown the limits of hyperglobalisation, has already pushed many companies to abandon just-in-time and build up more stocks’.

What can be said about the conditions in which the WTO finds itself? “You can’t say it’s doing well” he replies. “It has suffered several blows, which started before the arrival of Donald Trump. Difficulties emerged already during the Doha Round in 2001, due to problems in finding a consensus within the organisation.”

The interests of the 166 WTO members are very different. “To reach a consensus requires very strong leadership from the trading powers, which there has not been. The members of this group, which includes players such as the US, the EU, China, India, South Africa or Brazil, have never been able to agree on the most crucial issues,” he concludes.

Translated from Italian by DeepL/ds

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