The United States and Switzerland are nearing an agreement that could slash tariffs on Swiss goods from 39% to 15%, signaling a potential easing of Washington’s aggressive trade stance. The move follows months of behind-the-scenes negotiations and comes as both economies face mounting pressure from prolonged trade disruptions and slowing global growth.

U.S. President Donald Trump said on Monday that the White House is “working on a deal to get the tariffs a little lower,” adding that he wanted to ensure Switzerland “remains successful” as a key ally. While he stopped short of confirming a final figure, sources cited by Bloomberg and CNBC said the administration is aiming to align the Swiss tariff rate with the 15% duty imposed on European Union exports.

If completed, the agreement would mark one of the most significant tariff reductions under Trump’s current trade regime, potentially restoring confidence among global investors rattled by escalating protectionism.

Diplomatic Reset: Washington and Bern Seek Common Ground

The 39% tariff, imposed in August 2025, was one of the steepest duties introduced by the Trump administration in its broad campaign to address perceived trade imbalances. Switzerland, known for its high-value exports of watches, machinery, pharmaceuticals, and luxury goods, was caught off guard by the move.

“I haven’t set any number, but we’re going to be working on something to help Switzerland,” Trump said in the Oval Office, noting that “the country has been a very good ally.”

The Swiss government, for its part, confirmed ongoing discussions but declined to offer specifics. “Economy Minister Guy Parmelin is in regular contact with U.S. Trade Representative Jamieson Greer,” a spokesperson from Switzerland’s Economy Ministry told CNBC.

Trade analysts say the negotiations reflect a wider recalibration in Trump’s trade policy, balancing protectionist rhetoric with pragmatic concessions aimed at stabilizing markets ahead of next year’s elections.

“This is a symbolic move as much as it is economic,” said Carsten Nickel, managing director at Teneo Intelligence. “By lowering tariffs on a politically neutral and economically vital partner, the administration is signaling it’s open to targeted trade détente where it benefits U.S. interests.”

Corporate Fallout: Tariffs Weigh on Swiss Exporters

The 39% duty dealt a significant blow to some of Switzerland’s most iconic industries. Shares of Swatch Group and Richemont  two major luxury watchmakers  rebounded Tuesday on news of progress toward a deal, after months of underperformance linked to weaker U.S. demand.

Executives from Swiss watchmaker Breitling were among the most outspoken critics of the tariffs, calling them “horrible” for Swiss business. “These duties have hurt the entire ecosystem  from component suppliers to retailers in the U.S.,” Breitling’s CEO said in an earlier interview.

Switzerland’s export portfolio, which also includes pharmaceuticals, chemicals, precision machinery, and high-end electronics, has been disproportionately affected by the tariff structure. Many companies shifted shipments toward Asia and the Middle East to offset lost American sales  a temporary fix that increased logistics costs and strained margins.

Despite Trump’s complaints about trade deficits, the Swiss government maintains that the relationship is broadly balanced when accounting for both goods and services. The U.S. had a $38.5 billion goods trade deficit with Switzerland last year, but it runs a surplus in services, especially in finance, software, and consulting.

“The U.S. has a surplus in services exports, while Switzerland enjoys one in goods,” the Swiss government said in August. “This balance reflects complementary trade, not unfair practices.”

Strategic Implications: Beyond Bilateral Relations

The prospective U.S.-Switzerland deal comes amid wider global trade realignments. In recent months, Washington has reached tariff accommodation agreements with the European Union and Japan, and discussions with India and South Korea are reportedly advancing.

Analysts view the Swiss talks as a test case for a more flexible, country-specific approach to U.S. trade policy  one that maintains leverage but rewards cooperation.

“Cutting tariffs for a non-contentious partner like Switzerland allows Trump to claim a win on diplomacy without undermining his broader trade narrative,” said Samantha Gross, director of the Energy and Climate Initiative at Brookings. “It’s a recalibration rather than a retreat.”

Meanwhile, Swiss corporations are expected to regain competitiveness in U.S. markets if the duty is cut to 15%. Luxury goods, chemical products, and precision instruments  which represent more than $45 billion in annual exports to the U.S.  would benefit immediately.

Outlook: A Step Toward Stability, Not Free Trade

While the impending deal may mark the first thaw in U.S.-Swiss trade tensions, it does not signal a wholesale reversal of Trump’s tariff doctrine. The administration continues to favor bilateral leverage and conditional relief, rewarding countries that align with U.S. policy objectives, particularly on China and Russia.

If finalized, the U.S.-Switzerland accord could restore trade flows, ease inflationary pressures on imported goods, and bolster confidence in Europe’s export outlook. But the broader message is clear: tariff relief will come only where strategic alignment meets economic self-interest.

As one European diplomat put it, “This is less about free trade and more about selective friendship  but for now, markets will take the calm.”