Customs duties in the United States on pharmaceutical products could lead to a recession in Switzerland, but its impact is difficult to calculate while expecting to know more about Donald Trump’s intentions, according to a Zurich economy teacher.
On Friday, the president of the United States said he wanted to apply “Customs” 100%”Customs” to the brand “and patented” pharmaceutical products “from October 1,” unless a company built its pharmaceutical factory in the United States, “he wrote in a message posted on his real social platform.
“Many details are not clear,” said Hans Gersbach, economy professor and co -director of the Center for Conditional Research for the Federal Polytechnic School of Zurich, during an interview with AFP.
“Particularly vague”
“If a large proportion of exports to the United States in the pharmacy sector underwent customs duties and remained in place for a long time, there would be a clear risk of recession in Switzerland,” he said.
But the scope of these customs tasks remains “particularly vague,” insists, and, therefore, we will have to wait to know exactly what companies and pharmaceutical products will be affected to completely evaluate the repercussions for the Swiss economy, according to him.
This research center linked to the University of Zurich has developed a model that makes it possible to quickly calculate the impact of a shock on trade, such as customs tasks.
On August 1, when Switzerland was imposed on the customs tasks of 39% by Washington, this research center had been able to carry out a first evaluation in a few hours, then estimate the impact on the Gross Domestic Product (GDP) of Switzerland about 0.3% and 0.6%.
It was “a great shock” for the Swiss economy, but according to this model, a recession seemed to be “avoided,” explains Hans Gersbach.
7 to 8% of GDP
Because these 39% mainly affect watchmaking, machine tools and precision instruments (such as measurement instruments) or food products.
But customs duties on drugs, until now, would change the situation given the weight of the pharmacy in the Swiss economy.
The chemistry and pharmacy sector contributes to “around 7 to 8% of GDP” in Switzerland, has quantified Mr. Gersbach, and is the sector that has contributed more to the growth of exports in recent decades, he said.
In April, Roche and Novartis announced colossal investments in new factories in the United States, where the two groups already have important production centers. On Friday, the courses of these two heavyweights in the sector in Switzerland had also reacted little in the stock market.
“Large companies like Roche and Novartis could be exempt, but many smaller companies will be affected,” says Hans Gersbach.
Given the pressures to reduce the prices of medicines in the United States, Novartis announced on Monday that a new initiative with the launch in early November of a platform where its treatment called Cosinte (used against various inflammatory diseases) will be sold directly to patients in the United States, with an important discount.
Source: BFM TV
