When you walk into a negotiation at 31% and come out at 39%, something has gone fundamentally wrong. Not only is this an economic disaster for Switzerland – it is also a textbook example of how not to negotiate.

On Liberation Day (April 2, 2025), Trump announced tariffs on Swiss goods at 31%. He signaled it was the ceiling – the worst case, the maximum – and that he would strike hundreds of deals with many countries, opening the door for negotiations. Just one week later, after a seemingly cordial phone call between President Karin Keller-Sutter and Trump, hope returned to Bern. Keller-Sutter argued that Swiss companies create tens of thousands of jobs in America and reminded Trump that Switzerland had already abolished its tariffs on U.S. industrial products. The mood was suddenly buoyant: maybe 31% would never materialize; maybe the number would be cut – perhaps even disappear altogether.

But then came the summer. On July 31, during a second call, the mood flipped. Determined to push for a drastically lower rate, Keller-Sutter pressed the case. But her tone, according to several reports, was perceived as lecturing. Trump’s reaction was swift: he cut off the call, declared he wanted no further talks, and raised tariffs to 39%.

In desperation, the Swiss delegation flew to Washington – a last-ditch attempt to repair the damage – but returned home empty-handed, without even a meeting. Switzerland was left with 39%.

So what happened here — a textbook case on two levels

Inside the Room: Playing the Wrong Game

The Swiss entered the talks convinced that arguments, facts, and moral reasoning would carry weight. They tried to persuade Trump that free trade is good for both sides, that Switzerland had done its part, that fairness should count. But in any negotiation, “being right” is risky – and with Trump, it is fatal.

Facts are irrelevant for him; details don’t matter. What matters is the narrative, the story he can tell the next day. Instead of offering a headline victory, the Swiss delivered explanations of why tariffs are bad for both sides. It was a clash of negotiation cultures: one side wanted to be correct, the other wanted to be seen winning. The collision made escalation inevitable.

Sending Keller-Sutter to negotiate directly with Trump was also a strategic mistake. The ultimate decision-maker should only enter when teams have ironed out 95% of issues, back channels have warmed the counterpart, and it’s about closing. Going in early, without that groundwork, turned the top leader into the messenger — and made the setback personally and politically costly, which now makes re-engaging Trump vastly harder.

Zoom Out: A Lack of Strategic Analysis and Preparation

Zoom out, and the deeper failure becomes obvious: the approach was set up to fail. Switzerland built on hope, not structure. Proper preparation would have flagged three dimensions.

First, balance of power. The asymmetry is obvious: the U.S. barely depends on Switzerland; Switzerland relies heavily on U.S. access. When exposure is that high, you must think in alternatives – routes and options for when the preferred path fails for any reason. That means scenario-planning for Trump’s erratic swings and considering whether joining an EU track, rather than negotiating solo, would create better leverage. None of that was meaningfully done.

Second, exposure. Could Switzerland realistically expect a better deal than Japan or Korea? Both matter far more to Washington and had already accepted compromises. Unless Switzerland could put something uniquely strategic on the table, the answer was always no. Expecting special treatment was not strategy; it was wishful thinking. In any negotiation, you must continuously observe, analyze, and reassess the environment. Early deals by Korea and Japan were strong signals that minimizing risk and damage would beat trying to outperform everybody else.

Third, timing. Japan and Korea locked in early – not perfect deals, but workable ones. Switzerland waited until summer, when U.S. leverage peaked. By then, the rational move for a small, asymmetrical player was damage control: secure a tolerable compromise quickly, even at, say, 15%. Instead, Switzerland held out for better – and ended up with worse.

Taken together, these blind spots meant Switzerland was negotiating as if the world were fair and goodwill was enough. In reality, without alternatives, leverage, or timing, the outcome was pre-written.

What Switzerland must do now

Rebuild the negotiation

If Switzerland wants to reopen talks, it cannot patch what broke – it has to start again. That means applying professional negotiation principles. The President must stay out of the room. Her role is mandate-giver, not messenger. A clear negotiation team must be set up with defined roles, speaking with one voice. The real work happens invisibly: back-channel conversations, away from the cameras, where options can be floated quietly and trust slowly rebuilt.

And the brief must be reframed. It is not about proving Switzerland is right. It is about designing a win-set that Trump can claim as victory. That means thinking in headlines, not in spreadsheets. Only when 95% of the substance is settled quietly does the President come back in – for the handshake and the signature.

Sellable Wins: A Game-Theory Perspective

From a game-theory lens, the question is simple: what does the other side optimize for? What is sellable for Trump? Switzerland needs to create offers that are cheap for Bern but very loud for Washington.

One headline almost writes itself: “Switzerland helps America break its dependency on China in rare earths.” Switzerland is already a hub for global commodity trading. Expanding this role to handle new U.S. LNG flows, rare-earth contracts, even strategic storage in Geneva or Zurich freeports costs Switzerland little – but gives Trump a visible win on one of the biggest geopolitical narratives of our time.

The second headline is just as powerful: “Switzerland helps America cut drug costs.” Few issues are as central to Trump’s domestic agenda as healthcare prices. Here, Swiss pharma can offer fast-track capacity for selected generics, commitments on biosimilars, even voluntary price caps to signal alignment. Again: relatively manageable for Switzerland, but headline gold for Trump.

And there should also be a credible fallback in view. Switzerland could signal that, if the U.S. remains unwilling to engage, it might move closer to the EU’s regulatory orbit. For Washington, that would mean losing a neutral channel for tax, IP, and commodity flows – a move costly enough to make the signal credible, even if Switzerland prefers not to go down that road.

Lesson for Leaders

The Swiss-U.S. tariff saga is not just foreign policy. It is a mirror for every high-stakes negotiation in business.

How often do executives fall into the same traps: relying on facts instead of stories, hoping instead of preparing, confusing being right with being effective? Switzerland made all of these mistakes – and paid the price.

The core lessons apply everywhere:

• Don’t negotiate on hope. Build alternatives, analyze the asymmetry, prepare the fallback. Without a BATNA, you are negotiating naked.
• Don’t mistake correctness for leverage. Being right is never enough. What counts is what the other side can declare as victory.
• Don’t misread timing. Secure “good enough” early rather than chasing perfect later, when your leverage is gone.
• If you are the decision-maker, stay out of the room. Let experts run the negotiation. Your role is to provide the mandate and close the deal.
• If you think you know the outcome already, stay out as well. Let other analyze, stress-test, and prepare alternative scenarios. You will need them.

Whether you are a government in Bern or a CEO in Zurich, the rule is the same: if you don’t understand the other side’s game, you are not negotiating. You are just hoping.