Since August 7, the United States has imposed one of its highest country-specific reciprocal tariff rates — 39 percent — on products of Switzerland, as well as a 15 percent country-specific rate on Liechtenstein. On Friday, the three countries issued a joint statement laying out the framework for a future “Agreement on Fair, Balanced, and Reciprocal Trade.”
The envisioned Agreement, targeted for the first quarter of 2026, would lower U.S. reciprocal tariffs to match those applied to products of the European Union and Japan and provide for preferential treatment under possible future Section 232 tariff regimes. Switzerland and Liechtenstein, in turn, would remove tariffs on U.S. products in certain key sectors, invest significantly in the United States in 2026 and beyond, and undertake several non-tariff reforms.
Parties with an interest in the particulars of the future Agreement may seek to participate in the process.
A Framework Now; A Future Agreement Intended
The Framework is not a legally binding instrument, nor has the United States yet implemented any of the tariff-related provisions envisioned therein. It is unclear whether the United States may take steps to implement some of the agreed-upon tariff reductions prior to the conclusion of a full-fledged Agreement. This has been done with respect to some trading partners, and the Executive Order governing U.S. tariff dealmaking contemplates the possibility of some implementation in response to a Framework deal.
Nevertheless, the U.S.-Switzerland-Liechtenstein Framework is silent on this question. As a general matter, implementation at the stage of a Framework should consider whether “any condition or conditions to such action have occurred or will occur before the relevant action by the United States,” suggesting that partial implementation by the United States could be expected to pair with partial implementation by Switzerland and Liechtenstein. For this Framework in particular, U.S. application of reciprocal tariffs is explicitly linked to progress on promised investments.
Barring partial interim implementation, both sides will need to maintain their attention to negotiations to keep moving the process forward. The Joint Statement indicates a shared target of the first quarter of 2026 for concluding a final Agreement.
Concessions on Reciprocal, Section 232 tariffs
As an initial matter, Liechtenstein’s participation in the Framework is attributed to its inclusion in the Swiss Customs Area, pursuant to treaty. Thus, the Framework is similar to the U.S.-EU Framework, insofar as it brings together members of a shared customs territory. However, the precise status of Büsingen am Hochrhein, a German exclave that is part of the Swiss Customs Area, is not expressly addressed in the Framework.
The Framework provides for tariff concessions by all parties. The United States will revise reciprocal tariff rates to apply the higher of either the U.S. most-favored-nation (MFN) tariff rate or a tariff rate of 15 percent, comprised of the MFN tariff and a reciprocal tariff on “originating goods of” Switzerland and Liechtenstein. Thus, reciprocal tariff treatment of originating goods of Switzerland and Liechtenstein will resemble that applied to originating goods of the European Union and Japan.
In addition, the United States will exempt “certain products” from the list of “Potential Tariff Adjustments for Aligned Partners” (PTAAP), as amended, from the reciprocal tariffs. Details on the specific products eligible to benefit from this exemption will presumably be set forth in any final Agreement. For comparison, recent Agreements with Cambodia and Malaysia created reciprocal tariff exemptions for most, but not all, PTAAP products.
Specific concessions with respect to possible future tariffs pursuant to Section 232 of the Trade Expansion Act of 1962 are also provided. Specifically, “the MFN tariff and the tariff imposed pursuant to Section 232” will “not exceed 15 percent” for originating pharmaceutical goods and semiconductors. Insofar as Section 232 tariff regimes for pharmaceutical products and semiconductors have not yet been established, it remains to be seen how far the planned treatment of Switzerland and Liechtenstein may deviate from any “baseline” Section 232 tariff on such products. Nevertheless, this commitment is notably more concrete than the “significantly preferential treatment” language used in the U.S.-UK Economic Prosperity Deal with respect to not-yet-implemented Section 232 tariffs on pharmaceutical products.
With respect to other Section 232 tariff regimes, the Framework does fall back on an open-ended commitment to “positively consider the effect of the Agreement on national security.” This language echoes similar commitments in recent Frameworks with Argentina and El Salvador.
As for Switzerland and Liechtenstein, they commit to apply “zero duties on all U.S. industrial goods, U.S. seafood, and certain U.S. agricultural goods” and to apply “tariff rate quotas for a number of other U.S. agricultural goods.” As with the PTAAP exclusions discussed above, the specific products ultimately eligible to benefit from these concessions will likely be identified in the context of any final Agreement.
Similar to the recent U.S. Agreements with Cambodia and Malaysia, this Framework does not prescribe unique rules of origin for determining which products may qualify for preferential treatment. However, it repeatedly employs the terminology “originating” goods, as opposed to the “products of” wording typically used in U.S. customs practice. It otherwise provides that the parties may “modify the Agreement with rules of origin necessary” to ensure that a future agreement’s benefits “accrue predominately” to the parties.
Investment in Addition to Trade
The Framework’s first section addresses investment in the United States, rather than trade. Switzerland pledges $200 billion over the next five years and Liechtenstein pledges $300 million over a less clearly established period. Although formulated in terms of an “intent to encourage and facilitate,” rather than a firm and final commitment, the Framework nevertheless goes beyond bottom-line figures and addresses several particulars of the intended rollout. Among these, the Framework provides for a frontloaded investment schedule with one-third of each country’s total investment figure targeted to occur by “the end of 2026.” Moreover, Switzerland’s investments are to be “across all 50 states” and focus on creating “manufacturing and research and development jobs.” The White House fact sheet associated with the Framework names specific target industries: “pharmaceuticals, machinery, medical devices, aerospace, construction, advanced manufacturing, gold manufacturing, and energy infrastructure.” The Framework does not tie Liechtenstein’s investments to any particular industry or locale but provides that its investments should create 50% more U.S. jobs over the next five years than currently attributed to Liechtenstein’s private sector.
The Framework also mentions the promotion of “training and apprenticeship programs…for U.S. workers in key high-growth sectors,” a unique measure that has not appeared in prior Frameworks or Agreements. More generally, all three countries pledge to “create the best possible environment to encourage and facilitate cross-border investments and job creation,” but the Framework does not specify what types of measures may be contemplated.
Common Non-Tariff Provisions
Although generally light on detail, the Framework addresses several non-tariff measures that have become a common theme of several other recent Frameworks and Agreements. These include the following commitments by Switzerland and Liechtenstein:
- To work with the United States to address “potential distortions of bilateral trade and investment arising from industrial subsidies or actions of state-owned enterprises.”
- To “cooperate, where relevant, on matters relating to transshipment and circumvention practices.”
- For Switzerland, to accord national treatment in recognizing U.S. conformity assessment bodies and facilitate the recognition of Federal Motor Vehicle Safety Standards and the acceptance of medical devices cleared or approved by the U.S. Food and Drug Administration.
- To clarify that states that are not party to certain government procurement agreements do not benefit from non-discriminatory treatment in central government procurement.
- To apply WTO principles in determining international standards within the meaning of the WTO Agreement on Technical Barriers to Trade.
- To “discuss robust commitments related to intellectual property rights protection and enforcement,” including with respect to geographical indications.
- To “consider opportunities to provide {U.S.} service suppliers additional access.”
- To “continue to protect internationally recognized labor rights” and “continue their cooperation on labor-related trade issues.”
- To “continue to adopt and implement high levels of environmental protections” and work with the United States “on trade-related environmental measures.”
- To “negotiate commitments on good regulatory practices.”
- For Switzerland, to facilitate “full pre-arrival processing, paperless trade, and digitalized customs procedures.”
- To “continue to refrain from imposing digital service taxes.”
- To “refrain from imposing customs duties on electronic submissions” and support a “permanent moratorium on customs duties on electronic transmissions” at the WTO.
In addition to the above, the Framework also alludes to more specific measures particular to the parties. For example, Switzerland commits to “address specific measures that restrict market access for U.S. poultry and poultry products” and streamline “sanitary requirements for labelling and certificates, particularly for beef, bison, and dairy products.” And both Switzerland and Liechtenstein specifically commit to address certain data localization and privacy mechanisms. These measures are all alluded to in the U.S. Trade Representative’s 2025 National Trade Estimate Report. In addition, whereas provisions addressing forced labor are a common feature of recent Frameworks and Agreements, the commitment to address the “worst forms of child labor in supply chains” in the U.S.-Switzerland-Liechtenstein Framework is distinctive. While largely consistent focus areas have appeared in the various Frameworks and Agreements announced to date, country-specific provisions such as these underscore the importance of each trading partner’s individual policies and supply chains.
A Degree of Economic Security Alignment
Economic security measures have become a common feature of recent Frameworks and Agreements, and the Framework with Switzerland and Liechtenstein is no exception. It covers four common issue areas: non-market policies, export controls and sanctions, investment review, and secure supply chains. However, like other recent Frameworks with Argentina, Ecuador, El Salvador, and Guatemala, the Framework with Switzerland and Liechtenstein is general in its terms, providing for “cooperation in addressing non-market policies of third countries,” “strengthening existing cooperation on U.S. export controls and sanctions,” “cooperat{ion on} matters related to the review of inbound investment,” and “work{ing} cooperatively…to secure supply chains and improve supply chain resilience in sectors of shared interest.” As such, the extent of change envisioned vis-à-vis current policy will need to be negotiated
Tariff Strategy and Legal Insight
The attorneys, licensed customs brokers, compliance professionals, economists, and trade specialists of Cassidy Levy Kent regularly assist companies in evaluating their supply chains to ensure compliant U.S. market access and adjust for tariff-related developments, both mitigating burdens and taking advantage of opportunities. In addition, they support clients in effectively advocating for policy changes. Cassidy Levy Kent also leverages its thorough understanding of relevant legal regimes to advise governments on tariff policy and procedures.