President Donald Trump announced Monday that the United States is working toward a tariff reduction deal with Switzerland, signaling the first major thaw in a months-long trade standoff that rattled luxury exporters and strained diplomatic ties.

At a White House press conference, Trump revealed that U.S. officials are exploring cuts to the 39% tariffs levied in August on Swiss goods after last-minute negotiations failed to yield a compromise.

“We’re working on a deal to get their tariffs a little bit lower,” Trump said. “I haven’t set any number, but we’re going to be working on something to help Switzerland.”

The proposed reductions could ease the tariff rate to around 15%, according to Swissinfo, bringing it closer to the level imposed on European Union exports.

Swiss Exports Hit Hard by 39% Tariffs

The Swiss Department of Economic Affairs confirmed that “talks are ongoing” but declined to provide further details. Diplomats in Bern had previously sought to cut the rate to 10%, though summer negotiations in Washington ended without success.

The Swiss Federal Council reported that roughly 60% of Swiss exports to the U.S. are affected by the tariffs, including high-end products from Richemont, Rolex, and other luxury manufacturers. Following the tariff hike, Swiss exports to the U.S. plunged 55% in September compared with the previous year.

“We hit Switzerland very hard,” Trump admitted. “We want Switzerland to remain successful.”

Despite the sweeping trade measures, pharmaceutical exports—Switzerland’s largest export category—remain exempt. Pharmaceuticals account for 18% of Switzerland’s total exports to the United States, though uncertainty lingers over other sectors.

Gold Confusion and a Swift Correction

Before the tariffs took effect on August 7, many U.S. investors scrambled to stockpile Swiss gold, anticipating price spikes. However, confusion followed when U.S. Customs and Border Protection clarified that the tariffs applied to all gold bars, not just Swiss-made ones.

Days later, Trump backtracked, announcing that Swiss gold would be exempt and formalizing that exemption through a September 5 executive order.

Renewed Talks Signal Progress

Diplomatic momentum appears to be rebuilding. Talks resumed last week between Swiss Federal Councilor Guy Parmelin and U.S. Trade Representative Jamieson Greer, with Parmelin describing discussions as “very constructive” in a social media post Friday.

If successful, the U.S.-Switzerland tariff accord could mark one of the Trump administration’s most significant recalibrations of trade policy toward an ally—signaling a possible end to one of Europe’s most closely watched trade rifts.