In an unprecedented move that could offer lessons for Canada, Swiss multinational corporations successfully negotiated directly with the Trump administration to secure tariff relief after their government failed to make progress. The unusual arrangement saw companies including luxury watchmaker Rolex, luxury goods conglomerate Richemont, and shipping giant MSC take matters into their own hands.
The Swiss Breakthrough
Last week, Switzerland achieved a significant trade victory when it secured an agreement with the Trump administration to reduce staggering 39 percent tariffs down to 15 percent. What made this deal remarkable wasn't just the economic relief for Swiss exporters, but how it was accomplished.
After the Swiss government repeatedly failed to obtain tariff relief through traditional diplomatic channels, several of the country's largest multinational corporations decided to negotiate directly with U.S. President Donald Trump. The negotiations appeared to have government approval, suggesting a coordinated private-sector approach to resolving trade disputes.
As part of the final agreement, the Swiss companies committed to invest US$200 billion in the United States, creating a win-win scenario that addressed American economic priorities while providing Swiss businesses with much-needed tariff relief.
Canadian Trade Stalemate
According to prominent economist Jack Mintz, Canada should take note of the Swiss example. Canadian trade negotiations with the United States have reached a concerning stalemate, with little progress evident despite the economic damage being inflicted on Canadian exporters.
While some trade experts advocate for strategic patience, Mintz argues that Canadian businesses cannot afford to wait for a resolution that could take two to three years to materialize. The economic consequences of prolonged high tariffs are already forcing Canadian companies to make difficult decisions about their operations and supply chains.
Mintz reports hearing from numerous businesses that are realigning their supply chains and establishing new or expanded facilities in the United States as a matter of risk management. Their assumption is that tariffs will remain in place for years, even if at potentially reduced rates. The trend is clear: in the first half of 2025, the United States attracted 45 percent of total OECD foreign direct investment inflows, far outpacing other developed economies.
The Diplomatic Disconnect
The current state of Canada-U.S. trade relations was on display recently at the annual AmCham Thanksgiving dinner, where both U.S. Ambassador to Canada Pete Hoekstra and Canadian Ambassador to the U.S. Kirsten Hillman spoke. According to Mintz, the event had a surreal quality, with both diplomats extolling the virtues of the Canada-U.S. partnership while completely ignoring the elephant in the room: Trump's tariffs.
Hillman did reference the stalled negotiations, predicting they would eventually get back on track. Hoekstra offered little public commentary but reportedly told multiple tables, including Mintz's, that Canada needs to return to negotiations. The disconnect between diplomatic pleasantries and commercial reality highlights the urgency of the situation for Canadian businesses facing real economic harm.
Flawed Arguments for Delay
Mintz identifies and challenges three common arguments for taking a patient approach to the tariff dispute.
The first argument suggests that because of CUSMA, Canada faces a relatively low effective tariff rate of 5.4 percent according to federal budget calculations. Some question why Canada should negotiate now when CUSMA is up for review in 2026. Mintz dismisses this reasoning as dangerously complacent, noting that important economic sectors are being hammered today by much higher rates.
The reality for Canadian exporters is far more severe than the average suggests: non-CUSMA-exempt autos and parts face 25 percent tariffs; steel, aluminum and semi-finished copper confront 50 percent duties; lumber and energy exports deal with 10 percent tariffs; finished wood products face 25 percent; and non-CUSMA exempt goods generally confront 35 percent tariffs. Additionally, Congress has eliminated the tariff exemption for packages under US$800, though a personal exemption of US$200 remains.
The second argument for patience hinges on the possibility that the U.S. Supreme Court may quash tariffs related to the International Emergency Economic Powers Act. While this would provide relief for so-called "fentanyl tariffs" - the 35 percent general tariff on non-CUSMA products and the 10 percent energy tariff - it would leave sector-specific tariffs untouched. These targeted duties continue to slowly bleed Canadian manufacturing exports, and new tariffs could be introduced under different legislation.
The Swiss example demonstrates that when government-to-government negotiations fail, private sector initiative can break the logjam. With Canadian businesses already adjusting their investment and production strategies in response to tariff uncertainty, Mintz suggests that following the Swiss model might be the most pragmatic approach to resolving the trade impasse and protecting Canadian economic interests.
