In the vast Alpine factory where Swiss Army knives are made, workers fixed finely sharpened blades onto stainless steel plates. Sealed in a bright red case and stamped with a silver cross and shield, a “Made in Switzerland” icon was born.
The US has long been our most important market, Carl Elsener Jr., CEO of Victorinox, which makes Swiss Army knives, said. But after President Donald Trump blindsided Switzerland last month by imposing a 39 per cent import tariff, the highest for any Western country, the ties were thrown into question.
This has set off an unexpected identity crisis in the orderly nation. Companies like Victorinox are weighing whether they move some parts of their production to America and still retain their Swiss essence. Switzerland’s principles of independence and neutrality are being tested.
“It was a shock,” said Elsener, who had anticipated an outcome more like that of the EU, which negotiated a 15 per cent tariff, or Britain, which was slapped with a basic tariff of 10 per cent.
After decades of easy entry into America, a wall has gone up for the Swiss. If the tariffs stay in place, Victorinox will face a $13 million US import tax bill next year.
The hit is painful after decades of paying a low 4.5 per cent tariff rate. Now, Victorinox’s total import tax is nearly 44 per cent. On top of that, the US dollar has slid an additional 12 per cent against the Swiss franc since Trump took office, sending the cost of Swiss goods even higher.
Swiss Army knives once passed through the US border without complication. “Now, we have tremendous bureaucracy for every knife,” he said.
The company must weigh every component, from the blades to the corkscrews, and report the data along with the steel’s origin. “We also have to say where the steel is melted, and where that company get its melting blocks,” he said.
“We have endured wars and global crises, always guided by the mindset of a family business that thinks in generations,” Elsener said. “The lesson is clear: build reserves in good times and keep investing in the future.”
New York Times News Service