The new U.S. Trade Representative, Jamieson Greer, has called on American companies to report unfair trade practices by other countries. As a result, Switzerland has come under the scrutiny of the new administration.

What Washington considers unfair trade practices was already outlined in a White House memorandum dated February 13. In it, President Donald Trump states that he intends to counter non-reciprocal trade relationships with tariffs.

The U.S. concerns likely go beyond tariffs for purely protectionist reasons. At least, former U.S. Trade Representative Bob Lighthizer always viewed tariffs as a tool to offset other factors such as tax incentives or (artificially) low wages.

As a result, U.S. trade relations should be reviewed with regard to the following points:

  • Tariffs on U.S. products
  • Unfair taxes on U.S. businesses, workers, and consumers (including VAT)
  • Non-tariff trade barriers such as subsidies and excessive regulation
  • Currency manipulation
  • Other trade practices that unfairly restrict market access

Switzerland will likely face criticism for its trade surplus in goods. It is also possible that the Trump administration will once again target the Swiss National Bank’s (SNB) monetary policy.

We have therefore outlined the key points on how Switzerland should respond to potential accusations:

1) Do not Panic.

Since Switzerland is not yet a primary target of the new Trump administration, it’s important to stay calm and quietly emphasize the benefits of mutual economic relations (see following point). We should avoid making “good television” in the spotlight and instead focus on securing a “good deal” behind the scenes.

2) Clarify that Switzerland is a Fair Trade Partner for the U.S.

Switzerland has several strong arguments to highlight its positive contribution to the U.S. economy. Swiss direct investments amounting to $300 billion directly support half a million jobs in the U.S. Additionally, Swiss companies are the seventh-largest foreign employers in the country, and they pay the highest average wages of all foreign firms. Moreover, the U.S. enjoys a significant trade surplus in services with Switzerland, which amounted to approximately 21 billion Swiss francs in 2022.

The accusation of currency manipulation could also be refuted if the Trump administration were to criticize Switzerland’s monetary policy again, as it did in December 2020. Since 2015, the U.S. has been reviewing its key trading partners for unfair interventions in the foreign exchange market. However, the criteria used (goods trade surplus, current account surplus, central bank interventions) do not adequately reflect the specific circumstances of many countries.

In the past, the SNB’s foreign exchange purchases have raised suspicions in Washington that Switzerland was seeking a competitive advantage in foreign trade. In reality, these interventions served only one purpose: fulfilling the mandate of price stability. Between January and October 2024, the SNB conducted foreign exchange purchases totaling 1.2 billion Swiss francs. To exceed the current threshold set by the U.S. Treasury, this figure would need to surpass 16 billion francs for the entire year (2 percent of GDP). Given the partially deflationary trends in recent years, Switzerland has strong arguments to counter such claims.

3) Learn from Other Countries.

If Switzerland suddenly comes under political scrutiny, it’s crucial to let the Trump administration claim a win. Mexico recently set an example by making concessions that largely consisted of actions they were already taking. Yet the U.S. government was still able to present them as a major victory. In a case like this, Switzerland could emphasize the abolition of industrial tariffs or the purchase of the F-35.

Should Switzerland face tariffs, it would, of course, have the right to take countermeasures in accordance with World Trade Organization (WTO) rules. The best approach to this situation needs to be carefully assessed. Once again, there are lessons to be learned from abroad. A particularly interesting example is how China responded to tariffs during Trump’s first presidency. While China did impose retaliatory tariffs, they did so at a slightly lower level than the U.S., which helped de-escalate tensions. Meanwhile, this approach allowed them to signal to their own population that they would not be intimidated.

4) Push Back on U.S. Export Restrictions for AI Chips.

As a reminder, the export restrictions announced in January categorize countries into three groups, with export limits depending on the classification. The goal is to close potential loopholes that third countries could use to help China access restricted chips. Unlike Germany, France, or the UK, Switzerland was not classified as a “trusted country.”

Such export restrictions are problematic for an innovation hub like Switzerland. If Switzerland remains downgraded, only about 16,500 AI chips would be available per year. These would then need to be distributed among large companies, startups, and research institutions. It’s easy to see how this would create uncertainty.

The final implementation, however, is still pending. On one hand, U.S. companies abroad may be eligible for special permits. On the other hand, the regulations are currently undergoing a four-month comment period. It goes without saying that Switzerland, as the historical “Sister Republic” of the U.S., should make full use of this period to secure a place in the group of trusted countries in the future.

Furthermore, this measure originated from the previous administration. It fits into a broader trend where security and economic policy are increasingly overlapping. In 2023, the U.S. designated certain key technologies, like semiconductors, as “Critical and Emerging Technologies” and tightened investment controls accordingly.

5) Focus on Sectoral Agreements for Free Trade with the U.S.

Free trade agreements (FTAs) are valuable not just with the U.S., but with all trading partners. Such trade facilitation measures increase the economic benefits for both sides. Naturally, Switzerland must consider local political realities when pursuing these agreements.

A comprehensive FTA with the U.S. would face significant challenges today. Switzerland would need to make concessions, particularly in agriculture, which are unlikely to be politically viable at home. However, as was the case during Trump’s first term, there could be room for liberalization steps in specific sectors.

Restarting exploratory talks on trade facilitation would be welcomed, not only from an economic policy perspective but also as a sign that the U.S.—contrary to current signals—is not closing itself off from the rules-based order. For a small, export-oriented economy like Switzerland, this would be particularly valuable.

6) Be Mindful of Collateral Damage.

Switzerland must also keep an eye on potential countermeasures from the EU. If retaliatory tariffs are imposed on all third countries, Switzerland would also be affected. This was the case in 2018 when the U.S. and the EU were in a dispute over tariffs on steel and aluminum. In the interest of stabilizing and further developing the bilateral relationship, Switzerland should urge the EU to exempt it from these countermeasures.