Insights 
VT 
The US President Donald Trump met with Swiss officials to discuss trade, aiming to lower Switzerland’s high tariff rate. Trump announced that further discussions would take place between the US Trade Representative, Jamieson Greer, and Swiss leaders.
The USD/CHF showed a small decline of 0.05% to 0.8103. Tariffs are duties on imported goods, intended to give local producers a competitive edge. While tariffs and taxes both generate revenue, they differ as tariffs are paid at ports by importers, unlike taxes paid at purchase by consumers.
Economists Views On Tariffs
Economists hold varying views on tariffs; some see them as protective, while others view them as potentially escalating trade tensions. Trump’s 2024 tariff plan focuses on Mexico, China, and Canada, accounting for major US imports, to support the US economy. He plans to use this revenue to lower personal income taxes.
Meanwhile, other financial markets reported mixed movements. Silver prices rose due to increased safe-haven demand, while gold also rose amid similar flows. The US Dollar index decreased as the government shutdown persisted. Various other currency pairs and cryptocurrencies saw modest changes.
We should see the recent meeting with Swiss officials not as an isolated event, but as a clear signal of the administration’s renewed focus on protectionist trade policy. This confirms that the tariff plans discussed during the 2024 election campaign are now actively being pursued. The immediate focus may be Switzerland, but the implications are far broader for global trade.
The market is already positioned for this uncertainty, with the US Dollar Index softening near the 100.00 level amid a prolonged government shutdown. The extremely low USD/CHF rate of 0.8103, a level rarely sustained since the early 2010s, underscores the current dollar weakness. Traders should anticipate that any further tariff rhetoric, especially against major partners, could accelerate this trend, making options that bet on a weaker dollar increasingly relevant.
Market Response And Strategic Positioning
Looking back at the 2018-2019 period, the imposition of tariffs on China led to significant spikes in market volatility and hurt sectors reliant on international supply chains. Today, with Mexico, China, and Canada accounting for over $1.3 trillion in imports to the US annually, the stakes are even higher. We should therefore consider positioning for increased turbulence in equity indices using derivatives.
This environment is fueling a clear flight to safety, evidenced by rising gold and silver prices. The present safe-haven demand is strong, and any escalation in trade disputes will likely intensify it. Derivative traders could use this as an opportunity to gain exposure to commodities or volatility itself through options, preparing for the market swings that typically follow major trade policy shifts.
