What we know about Switzerland’s and Liechtenstein's agreement
The White House released a Joint Statement and Fact Sheet on Friday outlining details of the US-Switzerland-Liechtenstein agreement. The US imported $378.5 million in PMMI products from Switzerland last year, its 4th largest sourcing market. The agreement's core development is that the US is offering similar tariff concessions offered to the European Union. Imported goods from Switzerland and Liechtenstein will be subject to a reciprocal tariff rate no higher than 15%. We anticipate this will materialize as imports being subject to the MFN if the MFN is higher than 15%, or a 15% flat rate. While this is still higher than the MFN duty-free, it is a significant improvement from the 39% reciprocal tariff currently in place. This reduced tariff is in line with most other source markets and with the reduced reciprocal tariff, we estimate tariff cost avoidance of $91 million next year.
A USTR Fact Sheet, which typically provides more details, has yet to be released but we will flag when it goes live.
What we know about South Korea’s agreement
Last night, the White House issued a fact sheet on President Trump’s recent meeting with President Lee Jae Myung of South Korea on October 29. The fact sheet clarified some additional details on U.S. tariff concessions:
Framework Agreements with Western Hemisphere Partners
Yesterday, the White House announced four new framework agreements with Ecuador, Argentina, Guatemala, and El Salvador. While none are top export market destinations, the US exported a combined $81 million in packaging and processing machinery to these countries last year.
There is some potential for minor market access wins. Ecuador may reduce tariffs on machinery (current MFNs range from duty-free to 25% for packaging and processing machinery). Argentina will allow US companies to use U.S. or additional standards for imports of goods made in the United States without additional conformity assessment requirements. This may benefit the $30 million of U.S. exports of processing and packaging machinery to the market. All four countries commit to strengthen intellectual property protections.
Of relevance to PMMI imports, the US agrees to “positively consider the effect that the Agreement has on national security” under the agreements with Argentina and El Salvador. This could mean that positive steps taken by Argentina and El Salvador could lead to some leniency by the US on the implementation of Section 232 action (including steel, aluminum, and copper) which could benefit any members sourcing such products from those countries.
We are keeping an eye out for other announcements on frameworks that may be released. Please see the links to the fact sheets for your reference.
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