Lufthansa a flight to help Switzerland

Switzerland has been struck by high tariffs from the USA 39% last week due to the "trade deficit". In an effort to reduce the "trade deficit" Switzerland officials have been talking with various Swiss companies. Following these talks Lufthansa came to the table of discussion and talked about its plan to buy over 100 Boeing planes in the coming years. Switzerland was already one of the low fiscality destinations that was thought of with some others like Malta or Cyprus. Lufthansa doesn't directly buy the planes, satellite companies do and then lease the planes.

Don't think Lufthansa is doing the buy in Switzerland as a pure act of kindness. Lufthansa is a German company that holds the company Swiss which is what is left from Swiss Air. Swiss was one of the only subsidiaries of Lufthansa to produce a net positive at the end of 2024 but these high tariffs could have a high impact on Swiss therefore reducing these tariffs is a survival move for Lufthansa.

The deal is for the moment only in talks, it would result in a win win situation. Switzerland on one hand reduces its "trade deficit" while probably providing additional tax cuts to Lufthansa which could manage to save a few millions on the operation.

One funny thing is that Switzerland doesn't have such a high deficit with the USA, even though it's not really efficient to calculate tariffs on import/exports of products it is even less without considering the services. Switzerland consumes a lot of services from the USA mostly from banking and IT companies. USA imports a lot from Switzerland (mostly gold and luxury products) 64 billions in 2024 while only exporting 25 billions but according to PWC USA benefits from a 20 billions USD trade surplus from Switzerland bringing the gap down to 20 billions down 50% from the original 40 billions which would massively reduce the tariffs.

Results, these tariffs will heighten the price of luxury goods and pharmaceutical products. I'm not sure this will positively affect Switzerland nor the USA. Let's hope for a brighter tomorrow.

Source of the image and news : https://www.20min.ch/ + yahoo finance