MEZZOVICO-VIRA, Switzerland—When Nicola Tettamanti checked his phone on Friday morning, his initial response was shock: During the night, President Trump had imposed nearly the highest tariffs on Switzerland.any nation on earth.
Tettamanti is the chief executive of a 55-year-old precision tool manufacturing company located in this town surrounded by mountains. He intends to further expand into the U.S. by establishing an office in Indiana in the near future.
His firm, Tecnopinz, relies on the U.S. market for up to one-fifth of the demand for its parts used in industrial machines that produce vehicles, aircraft, and timepieces.
I had to look at my phone twice, I thought it was false information,” said Tettamanti on the company’s factory floor, about two hours by train south of Zurich. “This is a disastrous situation.
In a country known for its neutrality and structure, the Swiss responded with surprise and bewilderment to Trump’s decision toimpose a 39% tariff—higher than all except three countries on last week’sexecutive order, Laos, Myanmar, and Syria. Switzerland is one of the few countries where the August tariff rate was higher than Trump’s April “Liberation Day” threats.
The action disrupted several months of discussions where Swiss officials thought they were close to achieving a beneficial agreement.
Business executives and lawmakers are trying to figure out why their traditionally steady connection with Washington has abruptly broken down. The Swiss newspaper Blick described it as the nation’s most significant loss since the French triumph at the Battle of Marignano in 1515.
Switzerland does not pose a risk to U.S. national security,” stated Jan Atteslander, a member of the executive board at the Swiss business group Economiesuisse. “Our chocolate and watches do not threaten American manufacturing.
Several people now question if Switzerland’s independent approach on the global stage should be abandoned in favor of a stronger connection with the European Union, which has secured a more favorable position.15% rate with Trump.
We are a small nation, highly susceptible to external pressures, and we have just experienced a deep humiliation,” said Sherban Tautu, the founder of Ten Edges Capital, an asset management firm based in Geneva. “The price of independence has suddenly become painfully clear to everyone.
The tax on Switzerland, which may still be modified before an Aug. 7 deadline, poses a risk of severely affecting crucial parts of the Alpine country’s export-dependent economy. The U.S. is Switzerland’stop destination for goods, including timepieces, chocolates, drugs, and machine tools. It places the country at a significant disadvantage compared to EU neighbors such as Germany, Italy, and France.
Switzerland generates every second franc through international trade, and approximately 19% of its exports are directed to the U.S., which is its biggest market, as reported by UBS. However, the connection works both ways: Switzerland is the sixth-largest foreign investor in the U.S., according to Economiesuisse, with prominent firms like Nestlé, Roche, and Novartis contributing to around 400,000 American jobs.
However, the main concern for Trump is that the nine million population country has one of the biggest trade deficits with the U.S.
The trade deficit for goods has increased significantly this year because of a rise in pharmaceutical and gold imports aiming to reach the U.S. before expected tariffs. The deficit stood at almost $50 billion this year by May, making it the fifth-largest goods-trade gap among U.S. trading partners.
In June, the U.S. Department of the Treasury placed Switzerland on its list of countries engaging in unfair economic and currency practices. During Trump’s initial presidency, Switzerland was designated as a currency manipulator, with claims that it was devaluing the franc to support its exports. The central bank has stated that its involvement in currency markets is aimed at maintaining stable inflation, not for gaining a trade benefit.
Speaking to crowds assembled on Friday to mark the signing of the country’s founding charter in 1291, President Karin Keller-Sutter stated that “Switzerland has faced numerous challenges” and will overcome them.
For several months, Keller-Sutter and her team have been working on an agreement that would involve Switzerland investing approximately $150 billion in the U.S. while maintaining a reduced tariff rate for its exports compared to the EU.
The two parties convened in Washington in April, following which Keller-Sutter mentioned that Switzerland was among 15 nations the U.S. was collaborating with to secure rapid agreements.
Switzerland enhanced its reputation when ithosted trade talksBetween the United States and China in May that resulted in a reduction of tensions. In recent weeks, officials from the Swiss government indicated that an agreement was nearing completion.
That hope disappeared late Thursday following a phone call with Trump, after which Keller-Sutter shared on X that “no deal was possible.”
“We are facing a $40 billion trade deficit with Switzerland. That’s a significant imbalance,” Trump stated on Friday.
Rahul Sahgal, the head of the Swiss-American Chamber of Commerce, mentioned that his organization participated in approximately 20 rounds of discussions between Swiss and American officials in recent months. He noted that the $150 billion proposed for Swiss investments in the U.S. represents a significantly higher amount per Swiss citizen compared to what other nations have pledged.
“We will never be able to import the same quantity of products from them as they will from us. Even if the Swiss consume bourbon daily and purchase a Harley-Davidson, the trade deficit will remain unchanged,” Sahgal stated.
Several companies acted quickly. The confectionery company Confiserie Bachmann, based in Lucerne and famous for its Schutzengeli—handcrafted guardian-angel chocolate truffles—closed its online store to U.S. customers to prevent the new tax.
We can survive without the American market, but it was a market that was growing for us,” said Raphael Bachmann, the managing director of a family business that is over 125 years old, with his father beginning to sell to U.S. customers several decades ago. “Enjoyment typically has no limits, but our guardian angels don’t pass through customs paperwork.
The total financial impact will vary based on whether the rate is reduced, and if medications, which are currently excluded, continue to be exempt.
If the tariff continues to be in effect, it could reduce Switzerland’s gross domestic product by approximately 0.6%—and considerably more if the exemption for pharmaceutical products is eliminated, according to a note from Capital Economics sent to clients.
It is exactly this ambiguity that has plagued Tettamanti’s company for months. Tecnopinz has been exporting to the United States since the 1980s. However, since Trump’s second term, much of its American operations have come to a standstill.
Wandering through his facility, where large machines and robotic arms shape, cut, and grind pieces of steel, aluminum, and titanium into smooth industrial clamps and other parts, Tettamanti expressed concern over the “loss of trust” resulting from Trump’s trade policies.
“I have American clients who have been purchasing from us for years, and they’re now saying, ‘Nicola, we need to pause the process, we need more information on tariffs,’” Tettamanti stated. “Well, the clarity we just received is like a punch in the face.”
Some people in Switzerland are beginning to question the nation’s typically strong ties with the United States.
We are a small country, we can’t exert pressure on the U.S.,” stated Karl Gschwend, a retiree residing in Zurich who previously worked as an electrical engineer with American clients. “I wouldn’t want to collaborate with Americans if I had the choice now. Well, perhaps in three and a half years when Trump is no longer in office.
Write to Georgi Kantchev atgeorgi.kantchev@wsj.com, Chelsey Dulaney at chelsey.dulaney@wsj.com and Margot Patrick at margot.patrick@wsj.com
