Agricultural tariffs, investments, taxes: Federal Council decides on mandate for negotiations with the USA

The Swiss are talking with the Americans about solutions to the tariff conflict – on both a technical and political level. Officially, negotiations are not yet on the agenda, but things seem to be becoming more concrete. The Federal Council adopted a draft negotiating mandate on Wednesday . This draft will now be sent to the foreign affairs committees of both parliamentary chambers and to the cantons for consultation.

Among the negotiating topics will be agricultural tariffs. The Federal Council is considering reducing import tariffs on certain agricultural products, such as citrus fruits, nuts, and seafood. These products are considered unproblematic domestically, as they pose little direct competition to Swiss farmers. Swiss tariff reductions on beef or grain, for example, would be much more sensitive domestically.

In connection with US imports, the term "hormone meat" is causing additional controversy. In Switzerland, the production of meat using growth hormones for animals is prohibited, but imports of "hormone meat" are permitted if appropriately declared. A duty-free import quota for beef from the US could therefore also facilitate imports of hormone meat.

In its communication on the negotiating mandate, the Federal Council does not mention domestically sensitive agricultural products such as meat or grain. However, this does not necessarily mean that these will not be an issue.

Also not mentioned is another American nuisance in Switzerland: the moratorium on the marketing of genetically modified plants, seeds, and animals . A bill to extend the moratorium, which expires at the end of 2025, is currently pending in parliament. At the same time, a draft bill to open up the market for certain plants derived from new genetic engineering techniques is in the pipeline. The government's legislative proposal is expected to be submitted to parliament in the first quarter of 2026.

Regarding the proposed negotiating mandate regarding the US issue, the Federal Council declared on Wednesday that the existing legal framework must be adhered to. This could be interpreted as meaning that the Federal Council does not want to make concessions that would require a change in the law. However, the government is leaving the back door open: "Should solutions emerge during the negotiations that require an adjustment of the legal provisions, appropriate decision-making bases would be developed along the lines of the existing competencies." In other words: As usual, Parliament decides on changes to the law.

Parliamentarians interviewed on Wednesday said: A "Lex USA" that angers the left by relaxing the genetic engineering moratorium and angers farmers by offering duty-free import quotas for beef and other sensitive products will have a very difficult time in parliament.

Outside of the agricultural sector, Switzerland unilaterally abolished its import tariffs in 2024. According to the government announcement on Wednesday, one topic for future negotiations is improving market access beyond tariffs – for example, through simplified approval of medical devices.

The Federal Council also wants to consider investments planned by Swiss companies in the United States. Such investment promises are also to be included in the negotiating mandate. Previously, a sum of approximately $150 billion within five years was discussed.

Cooperation in vocational training is also a topic. The US has long shown interest in the Swiss vocational training system. Tax issues are also on the agenda. This is likely to affect, in particular, the revision of the Switzerland-US double taxation agreement, which has been negotiated but is currently blocked in the US Congress. The revision could make Swiss investments in the US more tax-efficient and thus more attractive.

The handling of the global minimum tax is also a topic of discussion. The US had already declared under former President Biden that it did not want to participate. But the Trump administration went a major step further – by threatening sanctions against other countries that participated and imposed additional taxes on American corporations. How the EU responds to the American threat is likely to be crucial in this regard: This will largely determine whether, and in what form, the minimum tax regime survives.

The conflict was triggered by the Trump administration's announcement on April 2 that it would impose a general tariff of 10 percent on top of the existing import tariffs, and that it would impose significantly higher additional tariffs of up to 50 percent on imports from many countries. An additional tariff of 31 percent was announced for Switzerland. One week after that announcement, the Trump administration suspended the additional tariffs above 10 percent for an initial period of 90 days. Since then, half the world has been trying to negotiate with Washington.