From swissinfo.ch
Swiss exports to the US inched up in July, helped by gold and watches shipments, the second straight month of expansion before President Donald Trump unexpectedly slapped a 39% tariff on the country.
Foreign sales to America, adjusted for seasonal swings, rose 1.1% from June, the Swiss Office for Customs and Border Security said Thursday — bucking the 2.7% decline in overall exports.
Imports from the world’s biggest economy sank by 7.9%, part of a wider pullback across regions. That resulted in a trade surplus with the US of 3 billion francs ($3.7 billion), a touch higher than June’s 2.9 billion francs and near the average level over the last two years.
Exports got a boost from gold shipments, which jumped to the highest level since March. Foreign sales of Swiss watches, meanwhile, returned to growth. Excluding the US, they’d have dropped.
The data show the last month of trade before the highest US tariff among developed nations began, a burden that will “effectively annihilate” cross-border commerce in some areas, according to business lobby Swissmem. The group represents machine and technology makers, whose shipments are particularly hit.
The government presented a plan to help domestic businesses on Wednesday by cutting red tape to lower production costs. It called on ministries to urgently present ideas to alleviate regulatory burdens, while plans for new regulation are to be put on hold.
About 10% of Swiss exports fall under the elevated US tariff, the government said, with key goods like medicines exempt so far. Officials are still negotiating with Washington to secure a lower surcharge.
“Discussions are currently ongoing at various levels,” chief government spokesperson Nicole Lamon told reporters Wednesday.
The impact of the gold industry on Switzerland’s trade balance is more important than ever as the Trump administration focuses on leveling deficits. As the country is the world’s biggest gold-refining hub, record bullion exports worth more than $36 billion made up more than two-thirds of the small European nation’s trade surplus with the US in the first quarter.
Earlier this month, a federal ruling that gold bars will be subject to tariffs caused chaos in global bullion markets, before Trump weighed in to say the precious metal wouldn’t face a US levy.
Unlike gold, Swiss watches face the 39% tariff, which threatens to weigh on sales of timepiece makers like Swatch Group AG and Compagnie Financière Richemont SA. According to Vontobel analyst Jean-Philippe Bertschy, companies continued front-loading efforts to dodge US levies. Along with worsening consumer sentiment, they contribute to a dimmer outlook for the Swiss watch industry, he said.
Looking at the economy overall, however, the government and most analysts don’t expect Switzerland to enter a recession despite the outsized levy. A first estimate of growth in the second quarter showed surprise expansion of 0.1% after forecasters had predicted output would shrink.
The cautiously optimistic outlook could change, however, if US surcharges are extended to include drugs, as Trump has repeatedly threatened. Switzerland is a major exporter of pharmaceuticals, with medicines from companies like Roche Holding AG, Novartis AG and Sandoz AG last year accounting for almost half of the goods it shipped to America.
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