Swiss-US Trade Deal Sparks Controversy: Oligarch Diplomacy or Pragmatic Solution?

Key Takeaways:

• US tariffs on Swiss industrial exports to be reduced from 39% to 15%.
• Criticism over the role of executives from major corporations in negotiating the deal.
• Concerns about transparency and potential impact on other Swiss sectors.

Switzerland had initially rejoiced at securing lower US trade tariffs, but that sentiment was quickly replaced by a backlash against what has been described as “oligarch diplomacy” and the role played by executives from companies such as Rolex and Richemont.

A framework agreement announced this month by the US and Switzerland will reduce the average US levy on Swiss industrial exports from 39% to 15%.

Swiss officials hailed the agreement as a major achievement after months of protracted negotiations with the White House that at one point reached a standstill. However, the manner in which the agreement was reached has drawn criticism at home, potentially delaying the political process needed to complete a full deal and threatening its approval.

Executives from watchmaker Rolex, Cartier-owner Richemont, commodities trader Mercuria, private equity firm Partners Group, shipping company Mediterranean Shipping Company, and refiner MKS PAMP visited the White House before the broad terms of the tariff agreement were settled.

These executives met with US President Trump and presented him with a custom-engraved gold bar and a gold Rolex watch, attempting to highlight that the 39% tariff (the highest levied on any developed economy) was hurting the European nation.

Lisa Mazzone, president of the Swiss Green party, called the agreement a “poisoned chalice” and said her country had obtained these concessions through “questionable means and money handouts.” The Greens believe the treaty sacrifices Swiss agriculture, opening up the tightly protected industry to imports such as American beef.

Samuel Bendahan, co-president of the Social Democratic party’s parliamentary group, said it was unacceptable for diplomatic and economic policy to be “negotiated by billionaires and corporate CEOs in secret meetings.”

Local media described the so-called “gold bar diplomacy” as “indecent” and warned of an “oligarch takeover.”

Support for the agreement is much higher from the rightwing People’s party, while other media have described the economic diplomacy as a pragmatic move. Benjamin Mühlemann, co-president of the pro-business centre-right Free Democratic party (FDP), said that while the party had concerns about the concessions made to the US, “it is fundamentally positive when politics and business work together to achieve such an agreement.”

There has also been criticism of how much information the government shared with these business people regarding the political negotiations. “Some people in Switzerland feel this is very close to corruption,” said Daniel Woker, a former Swiss ambassador. “I’m not sure if this displays the best side of Switzerland. This displays power for money, but that’s not what we think of ourselves as a pillar of well-organised and legitimate international relations.”

“It’s the gold bar, the Rolex — and that photo,” said David Bach, dean of the International Institute for Management Development (IMD) in Lausanne and an expert in political economy. “In a country that typically values maintaining a low profile and humility on the international stage, the optics of presenting such lavish gifts so publicly is jarring.”

The division over the agreement could impede its passage in the Swiss parliament. In Switzerland’s highly decentralised system, the trade deal is still at a very early stage. The government needs to secure authorisation from parliament to begin formal negotiations with the US; any agreement negotiated with Washington must then be voted on by both houses of parliament. A public referendum may ultimately be required.

Even under the most ideal circumstances, the agreement may not be submitted to parliament until the end of 2026, though in the interim, the 15% tariff rate would go into effect pending approval of the agreement.

After earlier agreements between the EU and the UK with Washington, the Swiss side had been eager to secure a deal. Negotiators led by Swiss Federal President and Finance Minister Karin Keller-Sutter had believed they were close to a compromise in the summer, to reduce tariffs to around 10%, only for the White House to surprise politicians and business leaders with the imposition of a 39% tariff in August.

Given that Switzerland has eliminated its own industrial tariffs, and that the US is its biggest export market for watches, chocolate, and machinery, Trump pointed to the roughly $39bn US trade deficit as a reason for imposing higher tariffs.

As the deadlock continued, some in Swiss politics had pushed for greater private sector involvement, suggesting enlisting figures such as FIFA president Gianni Infantino who has a friendly relationship with Trump. “Everything they do is wrong,” one government official said. “Before that, everyone wanted the private sector to help solve the problem. I think the real issue is that government communication with the public could have been better.”

Guy Parmelin, the Swiss economics minister who succeeded Keller-Sutter in negotiating, dismissed criticism of the agreement, calling it “the best result we could achieve” and “we didn’t sell our soul to the devil”. Alfred Gantner, co-founder of Partners Group who attended the White House meeting, said public-private cooperation brought “a desperately needed solution.”

“This demonstrates the professionalism and open-mindedness of the Swiss leadership…They ensured that the private sector could transparently and constructively participate in advancing our country’s interests,” he said.

Omar Liess, chief commercial officer at MKS PAMP, said: “Public-private cooperation is not unique to Switzerland; if done well, this approach often yields excellent results.” Rolex declined to comment, while Mercuria, Richemont, and Mediterranean Shipping Company did not respond to requests for comment.

The Swiss economics ministry said the executives’ visits were a “private initiative” supported by the Swiss State Secretariat for Economic Affairs (SECO), “but independent of the Federal Council’s involvement.” The statement said: “At their request, the business executives were briefed by SECO on the status of the discussions prior to the meeting, but no details were disclosed. SECO did not disclose any confidential information at any time.”