Swiss lawmakers clash over higher food tariffs and bank liquidity reforms

The Swiss National Council has put forward a plan to raise import duties on agricultural and food products by CHF 175 million. The move aims to boost domestic food security and support local farmers. But the proposal has sparked sharp debate among lawmakers and officials.

Another key decision saw the council reject a public liquidity backstop for major banks, despite potential savings of CHF 140 million yearly for federal finances.

The tariff increase proposal was met with mixed reactions. Pius Kaufmann, a centre-party representative from Lucerne, argued that higher duties would align with Switzerland's international commitments while strengthening domestic supply chains. He framed the measure as a necessary step to protect local agriculture.

Criticism came swiftly from multiple sides. Niklaus-Samuel Gugger of the Green Liberal Party called the idea 'crazy', insisting tariffs would burden consumers rather than solve problems. Andreas Gafner, from the Federal Democratic Union, warned that the plan could disrupt markets and push down prices for producers. Finance Minister Karin Keller-Sutter also questioned whether now was the right time to introduce or raise such duties.

Historically, Switzerland has resisted tariff hikes in sensitive sectors like dairy, often using bilateral exemptions to uphold free trade principles. Current trade policies—shaped by EU bilateral agreements, WTO membership, and EFTA free trade deals—prioritise low tariffs and non-discrimination.

In a separate vote, the council decisively rejected a proposal for a public liquidity backstop (PLB) for systemically important banks. The measure, which would have taken effect in 2027, failed with 142 votes against, 45 in favour, and 6 abstentions. Had it passed, the PLB would have eased federal finances by CHF 140 million annually.

The National Council's decisions highlight contrasting priorities in economic policy. The agricultural tariff proposal now faces further scrutiny, while the rejection of the PLB leaves banking regulations unchanged. Both outcomes will shape Switzerland's approach to trade, finance, and domestic industry in the coming years.