The Swiss government is telling its domestic companies that they have not, in fact, found a clever way to skirt President Donald Trump’s tariffs by routing goods through the tiny neighborhood country of Liechtenstein.
“Such circumvention via Liechtenstein is fundamentally impossible. The United States applies its non-preferential rules of origin when levying additional tariffs,” a SECO spokesperson told Fortune in a translated email statement. “For a product to be considered ‘Liechtenstein origin,’ it must either be entirely manufactured in Liechtenstein or [have] undergone sufficient processing.”
Liechtenstein head of government Brigitte Haas said last week there’s concern, though improbable, of Swiss companies looking to Liechtenstein for ways to dodge import taxes, but the risks are high.
“It was really important with the response to China,” Lawrence said. “But there’s always this incentive to arbitrage between countries who are close to one another but have differentiated tariff treatment.”
Liechtenstein could likewise suffer, according to head of government Haas, who said last week that although the principality has stopped trade negotiations with the U.S. and accepted the 15%, Switzerland’s economic health could waver and impact Liechtenstein, which counts Switzerland as its domestic market. Haas also said many Liechtensteiner products don’t list Liechtenstein as their certified place of origin, leaving uncertainty about how explicit the U.S. was in outlining the reciprocal tariffs for the principality.
U.S. consumers could meanwhile begin to feel the impacts of these steep reciprocal tariffs, responding differently to the alternatives available from other countries, should Swiss imports no longer be as readily available or affordable. For example, according to Lawrence, U.S. consumers may now buy more Cadbury chocolate from the UK—where tariffs sit at 10%—despite not finding the product as appealing as Swiss chocolates, but because it’s theoretically cheaper and more abundant.
But these ramifications are about more than just chocolate.
“There’s going to be a lot of inefficiency,” Lawrence said. “Americans are going to buy inferior products.”
