Trump tariffs push Switzerland closer to EU

Still shocked at having been singled out initially for a 31% U.S. tariff compared to EU members, Switzerland’s Prime Minister and Finance Minister Karin Keller-Sutter joined European Union finance ministers in Warsaw today to review the volatile situation unleashed by President Donald Trump‘s cascading tariffs. Her attendance marks the first time a Swiss finance minister has participated in an ECOFIN meeting and underscores how Switzerland is bent on forging closer links with the EU in response to the upheavals caused by events ranging from Russia’s war in Ukraine to Washington’s protectionist moves. 

While Trump has since relented with the temporary imposition of a flat 10% tariff across the board, the original decision to hit Switzerland with steeper tariffs than most of Europe reinforced Swiss calls for closer ties with the EU and its members. 

Keller-Sutter told the Neue Zuercher Zeitung daily mid-week that “we want to stabilise, deepen relations with the EU”. Last December, a  commitment was reached in Brussels to strengthen their joint trading relationship. After the Trump-imposed tariffs, Keller-Sutter said she and EU Commission President Ursula von der Leyen had agreed to stay in close touch on how they should proceed.

Jean-Philippe Kohl, deputy director of the industry association Swissmem, said the U.S. policy shock made it even more urgent for Switzerland to approve a new deal with the EU, stressing how important it was to avoid creating additional problems with China “if the U.S. falls away”.

However, any EU accord faces a tough ratification process in Switzerland, where critics view the bloc as overly bureaucratic and a threat to Swiss sovereignty. According to centre-left Social Democrats MP Franziska Roth, even if it cleared the parliamentary process, any deal would still face an uphill struggle at referendum if it were unable to guarantee sustaining Swiss living standards such as higher wages. She noted how a parliamentary resolution last month urging the government to pursue a stronger security role in Europe and to explore the scope for improved Swiss security cooperation with the EU had received strong cross-party support. This indicated that most parties now believe a secure future for Switzerland is best assured through partnership with the EU, she said.

While the right-wing Swiss People’s Party (SVP), the country’s biggest party, remains adamantly opposed to closer ties with the EU, its leader Christoph Blocher described the U.S. tariffs as “absurd”. Former Swiss diplomat Daniel Woker, accusing Trump of “destroying the existing order”, claimed the U.S. president wants “a completely different world order, not just on trade.”