39%: Switzerland facing the Washington price dam

The decision taken by the United States to impose a 39% tariff barrier on Switzerland is more of a political decision than economic. It reflects the same dynamic used against close partners such as Canada, Brazil or Mexico, the latter being more strongly affected than the EU, in the more vulnerable and less balanced markets in terms of exchanges.

Switzerland accuses the blow in the face of the application of a typical strategy of “political war” or political warfare In English, which consists in using all the levers of power in order to obtain, in this case, political concessions – as well as other advantages by exercising a strategy of “lever”.

The use of this form of “total diplomacy”, also originally called “popular diplomacy” (popular diplomacy) Since the end of the First World War, had become a instrument to use against the enemies of the Eastern Bloc in the Cold War. Its use made it possible to couple different aspects of human activities by jointly targeting them in order to optimize the impact for the target objectives, such as the modification of the social or political structures of a State.

The legal arsenal of constraint

After the first two decades of the Marshall Plan where the United States had in fact obtained a right of gaze on its European allies, the use of “emergency laws” or exceptional had, in the wake of the 1973 oil crash and the taking of American hostages in Iran in December 1979, allowed Washington to apply measures of constraints and retorted retorts to dictate the economic agenda Under the Decade Reagan Decade Anti -Terrorism regime.

Trump bases his claims on an almost unlimited pricing power on theInternational Emergency Economic Powers Act From 1977, a law on sanctions and embargoes which does not even mention the customs tariffs. No president had used it to impose customs duties for 48 years, until Trump invokes this year, thus bypassing the constitutional prerogatives of the congress in matters of foreign trade and taxation.

Such measures provided for by emergency laws should not in theory not become permanent or legitimize sprains of the principles of freedom of commerce, as underlined by the legal office (OLC) at the end of the Carter presidency in 1980, when the United States sought to force their allies to cease any trade with Russia following the intervention of the latter in Afghanistan on December 27, 1979 Washington had also encouraged.

A decade later, the Helms-Burton and Amato-Kennedy (1996) laws were the first manifestations of this aggressive extraterritoriality, which forced Switzerland and Europe to adopt “blocking laws” to protect their companies from American sanctions that hit Cuba, Iran and Libya-a precedent that illustrates the recurrence of these coercive practices.

The use of means of “political war”-a preferred way by the proponents of a hegemonic approach such as Trump at the dawn of his second mandate-makes it possible to envisage today the establishment of “new rules” according to the principle of blackmail and the constraint of the strongest, giving the President of the United States the opportunity to overcome agreements and the binding multilateral framework by obtaining the concessions deemed necessary in order to establish new of the weakest.

This reversal seems all the more blatant since it contradicts half a century of American proselytism for the alleged defense of the values of economic liberalism and political non-interference. It is indeed a rupture, even a revolution that in fact repudiated the principles of Bretton Woods from 1945.

Switzerland in the pricing vice

The fact that Switzerland is affected by such high rates asks several questions and hypotheses. In the present situation of a substantial differential with those imposed on Europe, set at 215%, this poses a political challenge never seen for our country.

First of all, it is a question of determining exactly what were the American requests, including in the equation the security and political elements. On the side of the Federal Council, it is a question of reassessing the room for maneuver – including in relation to the choice of F-35 American combat aircraft whose exorbitant additional cost will have consequences on the security policy as well as on the Swiss economy.

As Berne has not yet concluded new bilateral agreements with Europe, this uncertainty created by American measures could have much more extensive effects on the banking field and the stability of the Swiss franc and its economy. An area where the United States competes with Switzerland with aggressiveness for at least two decades.

Let us recall that the export of gold from Switzerland to the United States constitutes the most important part of its exchanges-gold represents 27% of all the goods exchanged by Switzerland in 2024 according to the BNS, the pharmaceutical products Arriving in second position with 22%-significantly contributing to the deficit of the United States trade balance vis-à-vis the Confederation. However, made notable and surprising to say the least, this type of transactions on yellow metal, which benefit in the United States, escape the tariff measures. What justifies such an exception and prevents Swiss diplomacy from using it as a lever in the negotiation of a tariff agreement with Washington? Part of the response undoubtedly partially lies in fear of potential loss, much more damaging for the Swiss economy, of its first place in the raw material trading platform. US planning derives the specific flaws and weaknesses specific to each country.

Towards a coordinated response

Faced with the Trumpian Hubris, characterized by political volatility resulting in the increase in pressure, it thus becomes urgent to act.

The Federal Council must examine the means to be implemented within the framework of a coordinated policy with European partners who are also our main commercial and security allies, seeking to ensure a dual approach to rapprochement and coordination with the EU in the face of American pressures. Only such a dynamic would make it possible to get Bern from the current isolation by giving it an additional maneuverability in order to adopt credible retaliatory measures-weighing on the terms of negotiation with the US trade and treasury department-by countermeasures targeting the products and goods that Washington does not wish to see affected-making a significant part of these sanctions- Inflation – to American consumers.

This seems the only reasonable path to influence the excesses and the irascibility of American requests, encouraged by procrastination and the shyness of European leaderspreoccupied to save their market share.

Time is no longer in concessions or divisions. President Trump cradles illusions if he imagines himself correcting three decades of loss of competitiveness from American companies by constraint. In doing so, he jeopardizes the cohesion of all international relations, anchored on the accepted principles of the WTO. This recent escalation pushes general separation within a regime implemented since 1945 seen as a spraining for the coexistence of states.

Let us add that these unilateral “assaults”, coupled with military Keynesianism of the United States, resemble a forced and lonely march from a country resolved to decouple its economy from former partners who have become opponents-including Canada. Throwing the rejuvenation of the centenary liberal doctrine predicting that states of trade between them would have a lesser tendency to wage war.

A decade ago, the article “9/11 and the Advent of Total Diplomacy” writes jointly with political scientist Nancy Snow Explained how the instruments of such an approach, combining all the factors of power had been made legitimate and acceptable following September 11, 2001, by establishing a deep asymmetry within the framework of the great American security project of a permanent war against terrorism established by the United States. After two decades during which Europe and its partners knew how to or believed to be round, Washington today sends a clear signal, to its former allies as to its enemies, by demonstrating its resolution to use its power by the use of constraint instruments in order to ensure its hegemony.

Did you find an error? Please report it to us.