LEILA FADEL, HOST:
One of the tariffs going into effect this week is on products coming from Switzerland, 39%, one of the highest in the world. Esme Nicholson reports.
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UNIDENTIFIED JOURNALIST: (Speaking German).
ESME NICHOLSON, BYLINE: Switzerland's July Fourth equivalent takes place on August 1, but this year's national holiday celebrations were dampened by the news that the White House is imposing the highest tariff rate in Europe on Swiss imports.
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UNIDENTIFIED JOURNALIST: (Speaking German).
NICHOLSON: News bulletins conveyed a nation in shock. The small but industrious Alpine state earns every second Swiss franc from foreign trade. Its healthy and prosperous economy depends on it.
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PRESIDENT KARIN KELLER-SUTTER: Hello.
NICHOLSON: Switzerland's president, Karin Keller-Sutter, told reporters that she'd been expecting tariffs closer to the 10% deal the United Kingdom struck with the White House, or at least the 15% deal the EU has agreed upon.
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KELLER-SUTTER: (Through interpreter) Evidently, the negotiators we were dealing with had not secured the president's support, despite the positive noises they made.
NICHOLSON: So far, there are no specific details of the new U.S. tariff on Swiss goods. But the economy ministry says its current understanding is that the new tariffs do not apply to Switzerland's significant pharmaceutical sector. Gold is also understood to be exempt.
Hans Gersbach, co-chair of the Swiss Economic Institute in Zurich, says the Trump administration's tariff calculations make no economic sense, but warns that this does not detract from the danger they pose.
HANS GERSBACH: (Through interpreter) If our pharmaceutical industry is added to the mix, we'll see huge losses and a risk of recession.
NICHOLSON: Gersbach says every effort must be made to reach a deal but argues that countermeasures are futile. But as it strives to reach the White House before the tariffs take effect this week, the Swiss government has few concessions left to make. It already offered investment pledges and zero tariffs. Americans buy medicine, medical devices, coffee, watches and gold from Switzerland. Starbucks coffee is made in precision-engineered Swiss machines, all reasons for the large trade surplus Trump despises. And with a population of just 9 million, it's difficult to see how the Swiss can remedy the deficit. But the Alpine country's leader remains optimistic, despite accusations she misjudged Switzerland's standing with the White House.
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KELLER-SUTTER: (Through interpreter) Switzerland has weathered many storms. We just have to get to work to find solutions.
NICHOLSON: For NPR News, I'm Esme Nicholson in Berlin.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.
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