Insights 
VT 
USTR Greer stated that they will complete paperwork on several deals within the coming weeks or months.
The current tariff levels are determined by trade deficits with the United States.
Challenges With Switzerland
Greer noted that dealing with Switzerland presents a challenging situation. The mention of finishing paperwork on deals means we should expect market-moving announcements in the coming weeks and months. This uncertainty is a direct signal to anticipate higher volatility in major equity indices. Looking back at the 2018-2019 trade disputes, we saw that headline risk from similar announcements led to sharp, unpredictable swings, making long volatility strategies profitable.
We now have a clear formula that tariff levels are tied to trade deficits. The latest data released in July 2025 showed the U.S. trade deficit with the Eurozone widened by 4% year-over-year, making European exporters a likely target. This suggests traders should consider bearish derivative positions on European industrial stocks or buy puts on the Euro Stoxx 50 index.
The specific mention of a “challenging situation” with Switzerland puts the Swiss Franc and the Swiss Market Index (SMI) directly in focus. While the U.S. has historically run a goods trade surplus with Switzerland, which was over $22 billion in 2024, the issue likely involves non-tariff matters like currency valuation or financial services. With the Swiss Franc having already strengthened against the dollar by 2.5% since June 2025, we should anticipate potential actions aimed at weakening it.
Focus On Targeted Volatility
Our strategy for the coming weeks should therefore be centered on targeted volatility. This means using options to hedge against, or speculate on, policy announcements affecting specific regions. For instance, pairing a long volatility position on the S&P 500 with a targeted short on the Swiss Franc could capture the dual impact of broad uncertainty and a specific diplomatic challenge.
