Springboard Forum: Europe Pitches Stability to Investors in Light of U.S. Tariff Uncertainty 

When it comes to Swiss watches, it’s hard to find a design that hasn’t been done before. 

But Swatch this year saw an opportunity for what the watchmaker cheekily says it hopes will be a limited edition. 

The square-faced timepiece swaps the 3 and 9 digits and features an engraving of a percent sign on the back, a nod to the 39 percent tariffs that President Donald Trump has slapped on Swiss goods entering the U.S. 

“Luckily some people did not lose their sense of humor,” said Swiss Consul General Urs Broennimann said during the annual Springboard to Europe forum at Frazier & Deeter Wednesday.

Unlike the United Kingdom and the European Union, which have both negotiated at least preliminary deals to lower their tariff rates, non-EU member Switzerland faces the hefty import tax despite what it sees as productive economic ties with the U.S.

Switzerland saw the U.S. become its top export market in 2021, and perhaps adding insult to injury, it is a top-10 investor in the United States, with direct investment and trade accounting for 400,000 jobs, four times the number of jobs created by U.S. investors in Switzerland. See how many jobs Swiss investors create in Georgia

“We think that the bilateral economic relations are not just about the trade deficit; it’s also about investment and job creation and things like that, and that’s why it’s difficult to understand the 39 percent,” the Swiss consul general said. 

The Swiss case is an example of how mercurial U.S. trade policy has injected instability and uncertainty into the global economy, forcing a strange dichotomy when it comes to cross-border investment: Some foreign companies are speeding up plans to boost U.S. production and sidestep tariffs, while others are waiting things out, experts and economic development officials said at the annual Springboard event put on by accounting firm Frazier & Deeter, law firm Arnall Golden Gregory, EPIC insurance, the Metro Atlanta Chamber and other partners. 

Europe is pitching itself as a stable alternative for international companies and as a platform for U.S. firms looking to go global. 

“We all are talking about stability,” said Swiss Business Hub FDI director Daniel Bangser, who noted that while large projects are holding off, small and medium-sized investors continue to seek opportunity abroad. 

French-American Chamber of Commerce President Jacques Marcotte agreed, noting that foreign-investment flows into France remain strong, and savvy companies are using the country to launch into French-speaking zones of opportunity like West Africa. 

Ireland has seen a healthy investment pipeline, winning projects like Atlanta-based Acuity Inc.’s new AI-focused research hub in Cork, said Tony Hayes, vice president for engineering, industrial and cleantech at IDA Ireland in the U.S. 

That said, “tariffs are bad for everyone,” Mr. Hayes noted, and the uncertainty could chill investment by manufacturers in the long term, despite the fact that services and technology — think software, supply-chain management and financial services — seem to so far be unaffected by the “recalibration” many companies are having to undertake. 

“Any project that’s ongoing in Ireland, that’s committed, that’s still going ahead. Some of the new projects? There might be a bit of hesitance there,” Mr. Hayes said, partly due to the threat of inflation and possible downturns ahead. 

Metro Atlanta Chamber Chief Economist Jerry Parrish said there are two waiting games companies are playing when it comes to U.S. tariffs. 

The first is acute and could be resolved by next month as the U.S. Supreme Court decides whether to confirm a lower-court ruling saying that Mr. Trump was unjustified in using emergency powers to impose his reciprocal tariffs. That could force some countries to drag their feet on signing deals with the U.S., moderator and Frazier & Deeter tax partner Mike Whitacre pointed out, given that their leverage may change if Mr. Trump’s authority is undercut on the issue.

The second is a longer-term gamble on post-Trump politics, Dr. Parrish said, noting that the last time the average U.S. tariff rate exceeded 10 percent was 1943.

“This is what it all keys on: What’s your subjective probability on the next administration continuing this same thing? That’s a lot of betting when it takes you three years to establish a factory,” Dr. Parrish said.

Mr. Marcotte of the French chamber said companies are looking for workarounds. 

“Companies are now looking at acquiring an existing company, if they’re large enough to do so, so that they don’t have the three-year delay,” he said. 

The United Kingdom, meanwhile, is advocating for making moves, said Philipp Clarke, head of trade for the Department of Business and Trade’s office at the British consulate in Atlanta. Having spent a decade unwinding the side effects of Brexit, U.K. companies have become accustomed to uncertainty, he said. 

They also have the most policy clarity when it comes to the U.S., having landed one of the earliest trade deals with Mr. Trump, limiting tariffs to 10 percent on cars, planes and other key products as the U.K. reduced its own tariffs and boosted market access for U.S. agricultural goods. 

The U.K. and U.S. also see a lot of strategic alignment on trends that seem to have more political consensus, “like friend-shoring and the China competition — the direction to bring some of that back is not going to change,” Mr. Clarke said.  

British Consul General Rachel Galloway, on a panel with Mr. Broennimann, pointed to the technology deal with the U.S. signed during Mr. Trump’s  unprecedented second state visit last month as further evidence that the partners are plowing productively ahead, despite some differences of opinion. 

While the Trump administration does not share the U.K.’s devotion to free trade, Ms. Galloway noted that the U.S. and U.K. agree that the multilateral system must serve the interests of their people. 

“I think we’re a long way from seeing the death of multilateralism. What we’re seeing, I think, is probably slightly more calculated approach to it,” Ms. Galloway said. She noted that Mr. Trump’s goading of NATO to spend more on its defense is a vote of confidence in the alliance despite the “slightly harder edge” in the approach. 

“It’s multilateralism that says, ‘This is a multilateral institution. I’m a member of it. I’m paying into it, or I’m spending time in it. Therefore, it needs to work for my country, and most importantly, it needs to work for my citizens,’” Ms. Galloway added.  

For Switzerland and other small countries, however, fair international rules are essential. 

“Switzerland needs the respect of the rule of law, of international law. Otherwise, Switzerland cannot exist,” Mr. Broennimann said, while other speakers said their countries are accelerating efforts to diversify away from reliance on the U.S.

Immigration policy, some panelists said, has become a competitive advantage for European countries where it has become even easier to recruit talent than in the U.S. under Mr. Trump’s harsher immigration policies. 

Other speakers included service providers who shared insights on a third panel, representing the Czech Republic, Belgium, Germany, Italy and the Netherlands. 

The Swedish-American Chamber of Commerce Georgia, the Swiss American Chamber of Commerce Southeast and British American Business Council all participated in the event. 

• See the full list of panelists and partners here