Trade war: «Market amputation» – what the US tariffs on steel and aluminum mean for Swiss exports
Trade war
«Market amputation» – what the US tariffs on steel and aluminum mean for Swiss exports
The USA is doubling its tariffs on steel and aluminum imports, affecting Switzerland as well. The EU may now also erect new trade barriers.
Workers in a German steelworks: The European steel industry is facing major difficulties.
Patrick Pleul/DPA/Keystone
It is the latest escalation in the trade conflict: US President Donald Trump has, as threatened, doubled the tariffs on imports of steel and aluminum products to 50% – a 25% tariff had already been in effect since mid-March. Certain steel and aluminum products from Switzerland have been taxed at the border since Trump’s first term, but now the trade barriers are much more comprehensive.
The additional import barriers will slow the global economy and also represent a blow to the Swiss economy: According to the industry association Swissmem, about 8% of all exports from the Swiss tech industry to the US are at stake. This involves around 800 million of the approximately 10 billion Swiss francs in annual exports from these machinery, metal, and electrical companies to the US (2024).
With a tariff of 50%, exports would effectively be made impossible, Jean-Philippe Kohl told FuW. The head of economic policy at Swissmem calls it a «market amputation.» The European Union is a much more important trading partner for local exporters, but these exports also come under pressure because they are partially used for products destined for the US.
The EU fears cheap imports
Additional protectionist measures from the EU are also now threatening. There is great concern in European industry that the continent will be flooded with cheap steel and aluminum products that previously found buyers in the US. The fear is not unfounded. Globally, too much steel is being produced – China alone produced about as much in 2024 as the entire EU: 140 million tons.
And the EU already imposed import barriers on metals in 2018 when Donald Trump first launched steel and aluminum tariffs during his first term.
The EU import barriers are in effect until 2026 and also affect the Swiss industry. While Switzerland was able to negotiate quotas for various product categories – the 25% tariff only applies once these are exhausted – some quotas are narrowly defined according to Swissmem, and the measures create significant administrative burden for exporters. «The implementation is inefficient and very cumbersome for our members,» Marcel Menet, the managing director of the Aluminum Association Switzerland, told FuW.
The EU may now further seal off the market – a demand made by the European steel association Eurofer. The current protective measures are inefficient and insufficient. «Quickly adopting new measures is the only way to prevent the collapse of the European steel market,» a spokesperson writes.
Swissmem representative Kohl is confident that Switzerland would be exempted. «Against the background of the recently concluded negotiations on Bilaterals III, the EU has no interest in discriminating against Switzerland, an important trading partner, as a third country.»
The additional US tariffs are already a reality, but Jean-Philippe Kohl also believes in a solution here. «We are certain that the Federal Council will do everything possible in negotiations with the US to remove these tariffs.» Under the direction of Karin Keller-Sutter, the Federal Council is currently conducting intensive negotiations with Washington on an agreement on tariffs and believes a deal could be reached soon.
Steel mills in crisis
The additional US tariffs come at a bad time for the Swiss industry, which has been in a very difficult economic situation for two years. The situation is precarious for the two Swiss steel mills, Swiss Steel and Stahl Gerlafingen. Swiss Steel is cutting 130 jobs in Emmenbrücke, while 120 jobs are at risk at Stahl Gerlafingen – the owners of both plants, Swiss Steel Group and AFV Beltrame Group respectively, would like to take advantage of bridging aid approved by parliament, which would temporarily help manufacturers lower energy costs.
The manufacturers are suffering from global overcapacity, high energy costs, and weak demand. The malaise extends beyond the national border: European steel producers are also in crisis. According to the association Eurofer, the capacity utilization of EU steel mills is only 60% – far below the 75% needed for profitable operation. Steel companies like ThyssenKrupp are currently cutting thousands of jobs.
The higher US tariffs are not the actual problem for the steel industry – and if they were only temporary, the crisis would merely be mitigated. During his first term, President Trump largely kept the aluminum and steel tariffs in effect until the end of his four years in office. Now it remains to be seen whether he will insist on them again this time – his unpredictability makes any prediction impossible.
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