Trump imposes tariffs on Switzerland (illustration). Reuters Yonhap News. 

Switzerland has agreed to invest $200 billion (approximately 291 trillion won) in the United States and reduce mutual tariffs from the current 39% to 15%.

The Swiss government announced in a press release on the 14th (local time) that it had signed a Memorandum of Understanding (MOU) with the United States with these terms.

Under the agreement between the two countries, Swiss companies will make direct investments totaling $200 billion by 2028, including vocational education and training, in the United States.

Switzerland will open its markets for all manufactured goods, fish and seafood, and non-sensitive agricultural products. For meat, duty-free quotas (allocations) will be applied for 500 tons of beef, 1,000 tons of bison, and 1,500 tons of poultry.

In a press conference, Minister of Economic Affairs Guy Parmelin stated that pharmaceuticals, gold, and chemical products will continue to be excluded from tariffs, adding, "We plan to legislate the contents of the MOU within a few months."

In an interview with CNBC on the same day, Jamie S. Gorelick, Acting U.S. Trade Representative (USTR), confirmed that a trade agreement with Switzerland has been fundamentally reached and that details will be released on the White House website.

The Swiss government tweeted on X (formerly Twitter), "We thank U.S. President Donald Trump for his constructive cooperation." When asked by reporters why they were thanking Trump, Minister Parmelin replied, "We have to practice realpolitik, and it's important that we found a solution now."

Swiss President Karin Keller-Sutter (right) and Minister of Economic Affairs Guy Parmelin leaving the U.S. Department of State empty-handed. Getty Images via AFP Yonhap News. 

When asked if it would be better to invest domestically, Director of the State Secretariat for Economic Affairs Helene Budliger Artieda replied, "Where would you build a factory in Switzerland with $200 billion?" and added, "Switzerland has historically always been an overseas investor."

At the end of July, U.S. President Donald Trump notified Switzerland of a 39% tariff on Swiss imports immediately after a phone call with Swiss President Karin Keller-Sutter. This is higher than the 31% tariff rate applied since April of this year and more than double the 15% tariff rate that the European Union (EU) agreed upon with the United States around the same time.

Switzerland had initially expected a tariff rate of 10% and had reportedly even completed a draft trade agreement with U.S. government officials. However, it was reported that President Keller-Sutter angered President Trump during their phone call by "lecturing" him on the reasons for the trade surplus. A likely explanation for the 39% tariff rate is that it was applied at 1% for every $1 billion of Switzerland's $38.5 billion trade surplus (approximately 56 trillion won) with the U.S. last year.

Approximately 60% of Switzerland's exports to the U.S. are pharmaceuticals, and it also exports significant quantities of watches, precision machinery, chocolate, coffee capsules, and cheese. Switzerland's two largest pharmaceutical companies, Roche and Novartis, have already announced plans to produce 100% of U.S. demand locally.

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