U.S. President Donald Trump has imposed a 39% tariff on all Swiss imports, one of the steepest duties in his escalating trade campaign. The measure, announced on 2 August after a telephone call with Swiss President Karin Keller-Sutter, is due to take effect on 7 August and caught Bern off-guard, overturning what officials thought was a preliminary deal. Swiss Business Minister Guy Parmelin said the cabinet will hold an emergency meeting and is prepared to revise its offer to Washington—potentially through larger U.S. liquefied-natural-gas purchases or fresh Swiss investment in America—in hopes of averting the levy. Economists at ETH Zurich warn the tariff could shave 0.3%–0.6% off output and push the export-reliant economy toward recession; Nomura expects the Swiss National Bank to react with a 25-basis-point rate cut to –0.25% in September. Swiss stock-index futures fell ahead of Monday’s reopening after the National Day holiday, with watchmakers, luxury groups and pharmaceuticals seen bearing the brunt. Switzerland sent more than US$60 billion of goods to the United States last year, making the market its largest single destination. The Swiss move comes days after Trump lifted tariffs on Canadian goods to 35% and set a baseline 10% duty on all trading partners. Bank of America estimates the average effective U.S. tariff rate has already climbed to 14.6%, a level trade analysts say risks higher inflation and weaker global growth. Trump has defended the measures as bargaining tactics and suggested revenue from the tariffs could be redistributed to Americans or used to reduce the federal debt, positions that have drawn criticism from business groups and economists at home and abroad.