‘We haven’t sold our soul to the devil,’ Swiss defend U.S. trade deal

Switzerland’s fledgling trade deal with the U.S. is dividing opinion as government and business leaders welcome a “restart” for the country, while critics caution it amounts to a sellout to the White House.

The trade deal, announced on Friday, saw duties on Swiss exports to the States slashed from 39% to 15% and Swiss companies pledge to make $200 billion in investments in the U.S., including promises to increase manufacturing Stateside.

Switzerland had launched a charm offensive ahead of the deal, sending a group of top Swiss CEOs — including the heads of luxury goods giants Rolex and Richemont — to the States in early November, bearing gifts for U.S. President Donald Trump, including a gold Rolex watch and specially-engraved gold bar.

While Switzerland’s lobbying helped it secure its new framework trade agreement with the U.S., the deal drew criticism over the weekend.

The Greens, for example, called the deal a “surrender agreement” with party leader Lisa Mazzone reportedly saying the “the Swiss economic elite and the Federal Council are bowing down to Donald Trump” with Swiss consumers and farmers likely to pay the price.

The party also questioned the involvement of business execs, saying the government had bought the deal with “questionable methods and gifts of gold.”

Swiss Economy Minister Guy Parmelin rejected criticism that the deal amounted to a capitulation to Trump, and also defended the use of business leaders to woo the White House.

“We haven’t sold our soul to the devil,” Parmelin said in an interview with the Tagesanzeiger newspaper this weekend, adding that he was “satisfied” with the agreement and suggested it could still be tweaked and improved.

“I would be proud if we were back to zero percent tariffs. It’s been a long road, and the result is the best we could achieve. Above all, it gives us a starting point for the next negotiations,” he told the paper in comments translated by Google.

Parmelin said business execs who had travelled to Washington were only there to “explain their position” and how tariffs were affecting trade. He conceded, however, that the trip had had a positive impact on talks.

“But it’s true: they have influence because they have many good contacts in the U.S. — and not just with the Trump family. Some are friends with him because they play golf with him. I don’t play golf, that’s perhaps my handicap — but that’s life,” Parmelin said.

Swiss industry leaders are certainly relieved that a framework agreement has been reached but it will take time to implement. Question marks remain over some of the details, such as whether Switzerland will have to accept U.S. meat imports like chlorinated chicken or hormone-treated beef, which are controversial in Europe, as part of the duty-free bilateral tariff quotas that have been agreed in principle.

The framework agreement is non-binding too, with more talks set to take place to finalize details within the deal which will ultimately need the Swiss parliament, and potentially a public vote, to approve it.

The U.S. was upbeat about the deal on Friday, with U.S. Trade Representative Jamieson Greer telling CNBC that the Swiss’ $200 billion investment in the States would boost the domestic economy.

“They’re going to send a lot of manufacturing here to the United States — pharmaceuticals, gold smelting, railway equipment — so we’re really excited about that deal and what it means for American manufacturing.”

Swiss manufacturers are also relieved about the deal, according to Stefan Brupbacher, chief executive of Swissmem, an association which represents mechanical and electrical engineering industries who, he said, had seen a 15% drop in exports to the U.S. since August, with machine exporters hit even harder.

“For our members, there is great relief, because first of all, coming down from 39 to 15% puts us at par with our main competitors from Europe and Japan, and hence why we suffered enormously over the past three months with a slump of exports to the U.S. between 15% and 40%,” he told CNBC’s “Europe Early Edition.”

“This 15% tariff rate puts us at par with our main competitors, and that is a basis on which we can restart,” he said.

Flash data released by the Swiss economy ministry on Monday showed the economy shrank by 0.5% in the third quarter of 2025. The contraction, the ministry said, was “driven by a sharp decline in value added in the chemical and pharmaceutical sector, industry as a whole recorded negative growth.”

Alessandro Bee, economist at UBS, said in analysis Monday that despite the framework deal between the U.S. and Switzerland, UBS’ base case scenario was that the Swiss economy would see GDP growth of around 1% in 2026, which, it noted, “is noticeably below the average growth of 1.9% over the past 15 years.”

“Growth should be supported by the domestic economy, while we do not expect any significant impetus from foreign trade,” Bee said, cautioning that despite the reduction in trade duties, “tariffs on exports to the U.S. remain substantial and are likely to markedly slow export growth to the U.S. compared to the previous year.”

Noting that around half of Swiss exports to the U.S. are made up by the pharmaceutical industry, which was never affected by the 39% tariff, Bee said that any relocation of some pharma manufacturing to the States — which some Swiss pharma companies have flagged — could dent the economy further.

“Nonetheless, Swiss pharmaceutical companies have indicated they are prepared to relocate production for the American market to the U.S., and this newly reached deal is unlikely to change these plans. We expect relocation of pharmaceutical production will weigh on Swiss growth in the medium term.”