Trump Exaggerates Trade Deficit with Switzerland by Ignoring Surplus in Services

President Donald Trump has cited a $40 billion trade deficit with Switzerland to justify a new, high tariff on imported Swiss goods. But his figure ignores trade in services. The overall goods-and-services deficit is less than $9 billion. 

After months of warnings and negotiations, Trump signed an executive order on July 31 setting tariff rates on U.S. trading partners who didn’t “sufficiently address imbalances in our trading relationship.” Among the nations hit with the highest tariff rates is Switzerland, with a 39% rate.

“The problem with Switzerland,” Trump told reporters the next day, is “we have a $40 billion deficit with Switzerland. … That’s a big deficit.” He repeated the claim in an Aug. 5 interview on CNBC, increasing the purported deficit with Switzerland to $41 billion. Recounting his phone call with Swiss President Karin Keller-Sutter, Trump said he told her, “We have a $41 billion deficit with you, madam. … And you want to pay 1% tariffs. … We lose because I view deficit as loss.”