Swiss equities fell sharply on Monday as investors reacted for the first time to U.S. President Donald Trump’s decision to levy a 39% tariff on most Swiss exports. The blue-chip Swiss Market Index slid about 1.9%, its lowest level in more than three months, with watchmakers, pharmaceuticals and machinery groups among the hardest hit. The Swiss franc also weakened against the dollar. The duty, scheduled to take effect on Aug. 7, applies to nearly 60% of Swiss shipments to the United States, far above the 15% rate negotiated by the European Union, Japan and South Korea. Washington cited Switzerland’s CHF 38.5 billion goods surplus as justification for one of the steepest tariffs in its latest global round. After an emergency cabinet meeting, the Federal Council said Switzerland is “ready to present a more attractive offer” that addresses U.S. concerns and is prepared to keep talking beyond the deadline. Bern ruled out immediate retaliation and is studying options such as increased U.S. energy purchases or new Swiss investment in America to narrow the trade gap. Prospects for a quick deal remain uncertain. U.S. Trade Representative Jamieson Greer said in televised remarks on Sunday that the new tariff rates are “pretty much set” with little room for adjustment in the coming days, underscoring the limited window for Swiss negotiators to blunt the looming duty.