Tariffs blunt sales of Swiss Army knives

President Trump’s 39% tariff on Switzerland has forced some companies to consider whether they could produce in the United States while still retaining their Swiss identity, writes Liz Alderman from Ibach-Schwyz, Switzerland

- Liz Alderman

n the vast Alpine factory where Swiss Army knives are made, workers fixed finely sharpened blades onto stainless steel plates.

Corkscrews, mini-scissors and can openers were clicked in place. Sealed in a bright red case and stamped with a silver cross and shield, a “Made in Switzerland” icon was born.

Carl Elsener Jr, the chief executive of Victorinox, which makes the famed pocket tool, smiled at the craft work and pointed proudly to a photo of the former American President George H.W. Bush and his wife, Barbara, touring the factory during a visit in the late ’90s and assembling their own knives by hand.

The United States has long been Victorinox’s most important market, Mr Elsener said, raising his voice above the din of machinery. But after President Trump blindsided Switzerland last month by imposing a 39% import tariff, the highest for any Western country, the treasured ties were thrown into question.

“Tt was a shock,” said Mr Elsener, who, like many Swiss executives, had anticipated an outcome more like that of the European Union, which negotiated a 15% tariff, or Britain, which was slapped with a basic tariff of 10%. “No one had expected such a drastic step,” he added.

After decades of easy entry into America, a wall has gone up for the Swiss. If the tariffs stay in place, Victorinox will face a $13 million US import tax bill next year. After keeping US prices steady this year, Mr Elsener may have to raise them. The company’s professional kitchen knives suddenly cost more than those of European competitors. And US customs paperwork, once simple, is now a Kafkaesque ordeal.

“The new tariffs are hitting Switzerland’s export-oriented economy hard,’ said Jan Atteslander, a director at EconomieSuisse, the lobbying group for Swiss businesses. “A swift agreement on reducing tariffs is essential.”