(Zurich/Washington) The United States and Switzerland have reached a framework trade agreement, under which the U.S. will drastically reduce tariffs on Swiss goods from 39% to 15%, matching the EU's level. In return, Switzerland has pledged to invest $200 billion (approximately S$260 billion) in the U.S. by the end of 2028.
The White House announced in a statement on Friday (November 14) that the U.S. and the Principality of Liechtenstein, Switzerland, have reached a framework agreement and seek to finalize negotiations and the agreement in the first quarter of next year.
According to the White House statement, at least $67 billion of the $200 billion in Swiss investment will be in place next year. This will include previously pledged investments from Swiss pharmaceutical company Roche, Novartis, engineering firm ABB Group, and instrument manufacturer Stahller.
U.S. Trade Representative Greer stated that the agreement will eliminate long-standing trade barriers, open new markets for U.S. goods, and create thousands of jobs. He also welcomed "Switzerland's substantial investment, which will help reduce the U.S. trade deficit in pharmaceuticals and other key sectors."
Swiss Minister for Economic Affairs, Education and Research, Pamela Palmer, announced the agreement on Friday, saying it would give Switzerland a 15% tariff rate, equivalent to that of the European Union, covering 40% of Swiss exports. "We certainly hope that the $200 billion will be invested in Switzerland itself, which is why the Federal Council is also doing everything it can to reduce costs for our businesses."
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The agreement also guarantees that US tariffs on Swiss pharmaceuticals will not exceed 15%, meaning that the Trump administration's imposition of tariffs of up to 100% on some patented drugs under Section 232 of the Trade Expansion Act on national security grounds will not affect Switzerland.
Pamlán said the 15% tariff cap also applies to other Section 232 tariffs that the US may impose in the future, including on semiconductors, giving Switzerland key sectors equal treatment with the EU.
However, in an interview with Swiss German-language broadcaster on the same day, he stated that the effective date of the new tariffs is still uncertain, possibly in 10 to 12 days.
According to a Swiss government statement, Switzerland will reduce import tariffs on US industrial products, fish, seafood, and agricultural products considered insensitive, and will also grant fixed duty-free import quotas for various types of US beef and poultry.
The news of the US-Switzerland agreement has generally encouraged the Swiss business community. The Swiss Institute for Economic Research had originally predicted that the Swiss economy would grow by only 0.9% next year, but after the tariff reduction, the growth rate is estimated to exceed 1%.
