Swiss firms goal various export markets | EUROtoday

President Trump’s tariffs have induced shock worldwide, with governments scrambling to discover a deal to placate him. Some have managed: the UK obtained in first, with a candy deal of simply 10%, the European Union crept in behind with 15%.

Still greater than they have been paying earlier than Mr Trump’s “liberation day”, however lower than that they had feared.

Spare a thought then for Switzerland, which has been hit with punitive tariffs of 39%, and has thus far been unable to steer the US president to relent. Switzerland is just not within the EU, so it might probably’t profit from the deal struck by Brussels.

But Switzerland is frequently ranked because the world’s best and modern financial system. It can also be one of many greatest traders within the US, creating, Swiss enterprise leaders say, 400,000 jobs. That’s why they discover the US technique not solely outrageous, however inexplicable.

“Thirty nine percent tariffs: I was just shocked,” says Jan Atteslander, director of worldwide relations for the Swiss enterprise federation Economiesuisse.

“This is unjustified, you can’t explain why they are so high.”

Since the tariffs (the best in Europe and the fourth-highest worldwide) have been introduced on 1 August, the Swiss authorities has been desperately making an attempt to renegotiate with Washington, to no avail. The US president, it appears, has moved on to different issues.

Around 17% of all Swiss exports go to the US, a market Switzerland can’t afford to lose in a single day. Now that the tariffs have come into impact, the as soon as muscular Swiss financial system is struggling. Economic development is shrinking, and job losses in key industries seem inevitable.

Switzerland’s most profitable exports to the US are prescription drugs. Ironically, they don’t seem to be affected by the 39% tariffs, however could be topic to the 100% tariff on imported medicines that Trump lately threatened. That could be one other enormous blow.

Another huge Swiss exporter to the US is Switzerland’s world-leading medical know-how trade.

“It’s precision mechanics, it has its roots in the watchmaking industry,” explains Adrian Hunn, who’s managing director of Swiss Medtech, the commerce physique representing the trade.

The city of Biel, the historic residence of Swiss watchmaking, and now the location of medical know-how firms, demonstrates why there could also be no winners, however solely losers, from Washington’s tariff coverage.

The firm MPS (quick for micro precision methods), produces medical devices from aortic valve replacements to the tiniest of surgical drills, utilized in hip or knee replacements. Just the type of issues a rich nation with an ageing, and more and more obese inhabitants – just like the US – wants.

So exact is the manufacturing course of, that even the machines used to provide the gadgets are made and specifically calibrated domestically.

“It’s a very integrated way of working,” explains MPS’s CEO Gilles Robert.

“Measuring equipment, milling tools, cutting liquids. That’s why we call it an ecosystem that we have here in Switzerland.”

Mr Robert’s proudest product is the engine for the world’s solely medically-registered synthetic coronary heart.

Just 120 of them have been transplanted worldwide. “It’s a pump that will pulse in both sides, to create beating in both chambers, and allow people currently waiting for a transplant, people with terminal heart deficiencies, to keep on living.”

Technology like that is very totally different from the automobile trade, the place, typically, the brakes are made in a single nation, the windscreen wipers or door handles in one other, and all the pieces is assembled in a 3rd.

That’s why Mr Robert is just not satisfied that Trump’s acknowledged technique of shifting manufacturing to the US might work.

“It would be extremely challenging if not impossible to separate the components from the actual product assembly,” he says. “And I think those types of skills would be extremely hard to find in the US.”

Trump has mentioned the nations hit with tariffs will “eat them”. So can MPS soak up the 39%?

“They had the best price before the new tariffs came into effect,” says Mr Robert.

“We don’t have the leeway to give a discount to our customers, because the margins are already as low as they can be.”

Instead, says Adrian Hunn of SwissMedTech, “Medical devices will get more expensive for US patients.”

And he provides, in all probability for US taxpayers as properly. “Costs for hospitals and healthcare systems in the US in many cases are funded by public reimbursement programmes, and this means taxpayers bear the burden.”

Perhaps much more worrying for sufferers, since some excessive precision medical gadgets are made solely in Switzerland, is the likelihood that Swiss firms will cease exporting to the US altogether.

“These are companies that have very good products,” says Jan Atteslander of Economiesuisse. “And they have told us, we just stopped delivering, sorry guys.”

Mr Atteslander and Mr Hunn agree with the Swiss authorities’s technique of not retaliating to the US tariffs. Switzerland’s David, the considering goes, can’t realistically tackle America’s Goliath.

But the Swiss are actively chasing different markets. A commerce cope with India – “the fastest growing economy on the planet, 1.4 billion potential consumers,” Mr Atteslander factors out – got here into power on 1 October.

An settlement with South American commerce block Mercosur has additionally simply been concluded, Switzerland’s longstanding commerce cope with China is being upgraded, and free commerce with the EU, the marketplace for 50% of all Swiss export, stays intact.

So though the US tariffs are already damaging the Swiss financial system, and a few nonetheless cling to hope that Trump could change his thoughts, there may be additionally a quiet confidence that Switzerland will, if it has to, climate this storm.

“To be a successful export nation, you have to have resilience in your DNA,” says Mr Atteslander.

The extra long-term harm could also be to the historically good enterprise relations between the 2 nations. In Switzerland, there’s a actual feeling of damage. The US wasn’t simply an vital market: the Swiss cherished doing enterprise there.

Many thought that they had discovered entrepreneurial soulmates, extra oriented to the free market than their extra regulated companions within the EU. Now, each Adrian Hunn of SwissMedTech and Gilles Robert of MPS have deserted that notion – for now at the least.

“I lived six years in the US, so I was very close,” says Mr Hunn.

“I have a lot of friends there. So, this, it didn’t change my view of America, but it did change my view, you know, of how the current administration in the US is acting globally, and treating allies.”

“I studied a year in the US,” says Mr Robert.

“It had an impact on me, on my way of looking at the world. How you can take risks, be an entrepreneur, and be positive about the future.”

But, he provides hopefully: “Even though I’m sad about this situation, we will overcome, we’ll find solutions, and I’m sure in the end reason will prevail.”