EM LATAM CREDIT: Mexico: 2026 Budget Proposal - Neutral

President of the Swiss Confederation Karin Keller-Sutter said that she had a "good meeting" with US Secretary of State Marco Rubio in Washington, D.C., adding it was a "friendly conversation." Keller-Sutter, who as president this year sits as the 'first among equals' as chair of the seven-member Federal Council that makes up Switzerland's collective head of gov't and state, did not answer questions from reporters on whether Switzerland could offer more to the US to avoid 39% 'reciprocal' tariffs. Keller-Sutter, who serves as Minister of Finance, was accompanied by fellow federal councillor Guy Parmelin, who serves as Economy Minister and vice president of the Confederation.  

• Posting on X, Keller-Sutter said, “We discussed bilateral cooperation between Switzerland and the US, the tariff situation, and international issues,”.
• The meeting with Rubio was seen as something of a snub for the Swiss, given that the State Dep't does not hold any powers in terms of negotiating bilateral trade deals. It is Treasury Sec Scott Bessent, Commerce Sec Howard Lutnick, and USTR Jamieson Greer who have led the way on trade talks ahead of the imposition of reciprocal tariffs on 7 Aug.
• It is unclear if the Swiss federal councillors will get to meet with President Donald Trump. While the president of the Confederation is entitled to represent the entire Federal Council on foreign visits, it is unclear if the US will acquiesce. 

• US TSY 17W BILL AUCTION: HIGH 4.105%(ALLOT 83.04%)
• US TSY 17W BILL AUCTION: DEALERS TAKE 26.35% OF COMPETITIVES
• US TSY 17W BILL AUCTION: DIRECTS TAKE 5.67% OF COMPETITIVES
• US TSY 17W BILL AUCTION: INDIRECTS TAKE 67.98% OF COMPETITIVES
• US TSY 17W BILL AUCTION: BID/CVR 3.31

Looking ahead to next week’s US CPI (Tue) and PPI (Thu) releases, latest monthly tariff revenue for July suggests we’re still some way off seeing the full impact from tariffs on prices. 

• The effective tariff rate currently stands at 18.3% according to Yale Budget Lab calculations (pre-substitution, i.e. keeping trade shares constant), up from 15.5-16% through June and 16.6% in July.
• In contrast, the $30bn of Treasury deposits from customs and certain excise duties in July was worth 11.0% of goods imports in 2024 (likely reflecting June average tariff rates suggesting further increases still to come). That’s up from 10.3% in June, 8.7% in May, 6.3% in April and 3.0% in Dec 2024 prior to the second Trump administration to give a sense of baseline.
• (Note that this 11.0% rate would be 10.3% if using a 12mth sum up to latest data for June owing to the sharp rise in imports in 1Q25. This dynamic approach with recent data can be misleading).
• Alternatively, these tariff revenues in July were worth ~1.7% of overall personal consumption expenditure, an increase of 1.3pp under the Trump administration.
• Of course, this doesn’t give insight into burden sharing across importers, businesses and consumers.
• On the former, June US import prices showed a partial correction stronger for those from China after what had looked like some taking of a tariff hit in April and May (implied by lower than usual import prices), but import prices more generally haven’t shown much concession. That’s in contrast to NEC Director Hassett saying on Aug 4 that data shows tariffs are being borne by foreign producers, although admittedly the extent to which they’re being borne is vague in that headline.