Decline in Exports to the USA by 22% Compared to Last Month
In the face of a decline in US business, Switzerland's overall exports have proven resilient, with increased deliveries to France, Austria, Poland, Canada, and Mexico helping to offset a modest 1% decrease. This robust performance has kept the Swiss economy on a steady course, despite the challenging global trade environment.
Imports from the USA have remained stable, contributing to a reduced US trade deficit with Switzerland. The deficit, currently standing at 2.06 billion Swiss francs (approximately 2.2 billion euros), is a significant improvement from the 2.93 billion Swiss francs recorded in the previous month.
The ongoing trade tensions between the two nations have been a topic of discussion, with both Bern and the US Trade Minister, Howard Lutnick, expressing a desire for lower tariffs. Last week, Minister Lutnick indicated that an agreement between the two countries was likely. However, specific details about the potential agreement have yet to be disclosed.
Tariffs on Swiss exports to the USA, announced by President Donald Trump in August, have been a point of contention. The 39% tariff, which came into effect on the 8th of August, has had a noticeable impact on Swiss exports. Total watch exports in August decreased by 16.5% to 1.64 billion Swiss francs, with deliveries to the USA falling by 23.9%. Other affected products, such as pharmaceuticals, also saw a decline, with exports decreasing by 1.3%.
The agricultural sector, known for its domestic self-sufficiency claims and political sensitivity, has been a particular focus of these trade discussions. Last Wednesday, the farmers' association rejected demands to increase imports of US beef and poultry.
Despite these challenges, the Swiss government remains optimistic, expecting the US tariffs to slow growth this year. However, they are also taking proactive steps to reduce dependence on the USA. This week, Bern signed a new free trade agreement with the South American Mercosur bloc, marking a significant step towards diversifying Switzerland's trade partners.
The Federation of the Swiss Watch Industry (FH) attributed the watch export decline to an expected correction after strong gains in April and July. This suggests that, while the current trade environment is challenging, there is hope for a rebound in the near future.
In the midst of these negotiations, it is clear that both the Swiss and US governments are working towards a resolution that benefits both parties. As talks continue, the future of US-Swiss trade relations remains uncertain, but both nations remain hopeful for a positive outcome.
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