Swiss president heads to US for talks to defuse tariff threat

Swiss President Karin Keller-Sutter and Business Minister Guy Parmelin flew to Washington on Tuesday, the government said, in a last-ditch effort to avoid the 39% tariffs announced by President Donald Trump on exports to the United States.

The U.S. tariffs, hiked from the initial 31% rate announced in April, have sent Switzerland reeling after they were announced on Friday.

The higher duty is due to take effect on Thursday.

During their visit, Keller-Sutter and Parmelin will "facilitate meetings with the US authorities at short notice and hold talks with a view to improving the tariff situation for Switzerland", the government said.

It not comment on which parts of the U.S. government they would meet in Washington or whether a meeting was scheduled with Trump.

The Swiss government said on Monday it was ready to make a "more attractive offer" to the United States as it sought to avoid a 39% tariff, which would damage Switzerland's economy.

The Federal Council, the governing cabinet, held an emergency meeting and said it was ready to pursue negotiations beyond the August 7 deadline.

The government gave no details of what extra incentives could be offered to secure a better deal, but it did say it was not considering any countermeasures against the U.S.

Parmelin has previously said that Switzerland buying more U.S liquefied natural gas (LNG) was under consideration, while further investment by Switzerland in the United States could also be an option.

The aim of Keller-Sutter and Parmelin's trip was to present "a more attractive offer to the United States in a bid to lower the level of reciprocal tariffs for Swiss exports, taking U.S. concerns into account," the government said on Tuesday.

Some Swiss business leaders, including Nick Hayek, CEO of watchmaker Swatch Group, had called on Keller-Sutter to visit Washington to do a deal with Trump directly.

A trade barrier of 39% would be a major blow for the export-orientated Swiss economy by reducing access to its biggest overseas market for its watches, machinery and chocolate, economists have warned.

Hans Gersbach, an economist at KOF Swiss Economic Institute at ETH, a University in Zurich, said the Swiss delegation would have to make a substantial offer to win a reprieve from the 39% tariff, with the visit representing a last-ditch effort to negotiate down the import duty.

"Something marginal won't be enough – it has to be a significant number, which Trump can present to his supporters as a victory for his negotiations,” said Gersbach.

"It's crucial Keller-Sutter and Parmelin meet Trump and speak with him directly. He is the decision-maker," added Gersbach, who thought there was reasonable chance of success.

The Swiss government knew how serious the situation is, and was putting all its efforts into getting a deal, he said.

"A 39% tariff on Switzerland, especially with the EU agreeing a rate of 15%, would be an immediate shock to the Swiss economy," said Gersbach.