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The Broken Modus Vivendi: Why Parmelin's Plain Speaking Actually Strengthens the Liberal Argument for Bilaterals III

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clarus.news | Analysis | May 18, 2026

Federal President Guy Parmelin spoke "plain words" publicly for the first time with EU Commission President Ursula von der Leyen on the SRF "Saturday Review" of May 16, 2026. Two decisions from Brussels – the doubling of steel tariffs to 50 percent from July 1st and a regulatory amendment on cross-border commuter unemployment costs of up to 900 million francs per year – violate the "Modus Vivendi" signed on June 24, 2025, by Federal Councilor Ignazio Cassis and EU Commissioner Maroš Šefčovič. The obvious conclusion seems to be: Those who cannot trust the EU should not conclude new agreements with it. But this logic reverses causality. A liberal reading reaches the opposite conclusion.

What Happened

On March 2, 2026, Parmelin signed Switzerland's new treaty package with the EU in Brussels – the so-called Bilaterals III. Ten weeks later, the same EU Commission made two decisions that, in the Federal President's words, are "unacceptable" for Switzerland:

First, Switzerland will not be exempted from the tightened EU steel protection measures. From July 1, 2026, tariffs on Swiss steel products will double from 25 to 50 percent, and duty-free import quantities will be roughly halved. The umbrella organization Metalswiss warns of the industry's "death blow."

Second, Switzerland should bear the full cost of unemployment compensation for cross-border commuters according to a planned EU regulatory amendment. The State Secretariat for Economic Affairs (SECO) estimates the additional costs at 600 to 900 million francs per year.

Both decisions contradict a political commitment by the EU. In the "Modus Vivendi" of June 24, 2025, Bern and Brussels committed to "smooth functioning" of their partnership – a standstill agreement for the phase in which the Swiss Parliament deliberates on the treaty package. Parmelin confronted von der Leyen in early May on the sidelines of the European Political Community summit in Yerevan: "Be careful, because what you're doing could also be an own goal for you."

Tschäni's Assessment: Pacta sunt servanda – in Both Directions

On LinkedIn, Hanspeter Tschäni – former ambassador and head of the International Economic Law department at SECO until 2012 – precisely categorized the incident: "It is bad policy to confront a partner with whom one has concluded a contract with such measures without seeking dialogue." In this capacity, Tschäni participated in numerous negotiations by Switzerland and EFTA; his judgment is not that of an offended loser, but of a negotiator who knows the Brussels machinery.

The decisive sentence follows immediately: "It is precisely the relationships built up with the Bilaterals that enable Switzerland to take action against such decisions. The Federal President has taken an important and correct step in this direction."

This differentiation is the core of a liberal position. Treaty compliance is not charity that the stronger side grants to the weaker. It is the foundation on which negotiations can take place at all. If the EU violates the modus vivendi, that is a problem for the EU – not an argument against treaties with the EU. Parmelin's appearance in Yerevan was only possible because there is a treaty whose violation he can prove.

The EU Context: The Steel Tariffs are Reaction, Not Aggression

An honest analysis must acknowledge what is often suppressed in Swiss outrage: The EU steel tariffs are primarily a reaction to US Section 232 tariffs, not a measure directed against Switzerland.

The US has imposed a punitive tariff of 50 percent on steel and aluminum imports since June 4, 2025; with the Trump proclamation of April 2, 2026, the assessment basis was also extended from the metal content to the full customs value. Steel that cannot be exported to the US seeks European markets – and the EU defends with its protective measures precisely that domestic industry suffering under the diversion effect. This logic is not anti-Swiss, but industrial policy.

FDP National Councilor Simon Michel, CEO of Ypsomed and one of the most prominent supporters of the treaty package, formulated this soberly in the NZZ debate of March 6, 2026: "The EU is not introducing steel tariffs on its own, but as a reaction to US tariffs. I am confident that they will grant us an exception. The German Economics Minister has already pledged her help." This confidence has been tempered since May 16 – the EU refers Switzerland to WTO procedures instead of bilateral negotiations. But Michel's basic assessment remains: We enjoy much goodwill in Berlin, Rome and Paris. The wall stands in Brussels, not in the capitals.

This does not exonerate the EU Commission. The modus vivendi implies a consultation obligation, not a waiver of protective measures. Precisely this consultation was omitted. But it refutes the notion that Brussels systematically plans against Switzerland. Those who invoke the "foretaste" that allegedly follows once the treaties are finalized project an intention that is not demonstrable in the steel decisions.

The Skeptics' Counter-argument – and Why It Falls Short

The "Liberal Network" writes on LinkedIn that it is "naive to believe that the EU will act in Switzerland's interest once the treaties are finalized. The mentioned examples are probably a foretaste." The position is internally consistent – but it reverses the relationship between cause and effect.

Three facts are difficult to accommodate in this narrative:

1. Without the modus vivendi, there would be no scandal. Parmelin can accuse the EU of "unacceptable" behavior because there is a written standstill agreement that was violated. Without this commitment, the EU would be within its rights to treat Switzerland like any other third country – with maximum tariffs, without consultation, without arbitration procedures. The outrage over breach of contract presupposes the existence of the contract.

2. Third-country status is the weaker position. Without Bilaterals III, Switzerland would have plummeted from duty-free (today) to 50 percent on steel exports – and would not even have the WTO quota procedure, but only unilateral EU determinations ahead. For cross-border commuters, Switzerland would be completely subject to EU regulations, without the "Joint Committee" on the free movement agreement, in which Parmelin can now announce "tough discussions."

3. Dispute resolution is built into the new package. What is missing in the modus vivendi – enforceable procedures instead of political declarations – is included in Bilaterals III. Those who criticize the current weakness of Switzerland's position should consequently favor a stronger treaty basis, not oppose it.

Walter Bornhauser formulated on LinkedIn what many feel: "Bravo for your courage, Mr. Parmelin. (...) We need statesmen and stateswomen who represent our people as well as our economy externally. This requires clear messages and positions that must be defended." That is correct – and the treaty co-signed by Parmelin is precisely the position now being defended.

The Asymmetry Both Camps Overlook

There is an aspect that neither supporters nor opponents of Bilaterals III sufficiently weigh: the structural asymmetry between an EU with 27 member states and a Switzerland with 8.9 million inhabitants. This asymmetry disappears neither through treaties nor through treaty renunciation. It only becomes more predictable through treaties.

The EU's steel tariff decision is – read politically and economically – a classic Brussels problem: A Directorate-General for Trade reacts to US tariffs, a Directorate-General for Competition defends the internal market, and the political top body does not sufficiently coordinate with the standstill agreement for Switzerland. This is not malice, but bureaucratic reality of entities with fifty thousand officials.

Binding procedures help precisely against this asymmetry. Bilaterals III contain for the first time an arbitration mechanism that complements political declarations like the modus vivendi. Those who today experience powerlessly how the EU Commission unilaterally changes regulations should approach Bilaterals III with increased interest – not with rejection.

Conclusion: One Side's Breach of Contract Does Not Justify the Other's Treaty Renunciation

The liberal position in the current situation is clear: Parmelin's plain speaking is justified, Tschäni's differentiation hits the core, Michel's assessment remains valid. The EU steel tariffs and the cross-border commuter regulation are reactions of an asymmetric bureaucracy to an external shock wave (Trump's tariff regime) – and they violate the modus vivendi. Both findings are simultaneously correct.

Those who conclude from this situation to reject Bilaterals III overlook: The shield that Parmelin held up in Yerevan is not Swiss sovereignty per se, but the contractually secured consultation and procedural basis. Without this shield, Switzerland would not be stronger, but more defenseless.

The liberal reflex has been for over two centuries: reliability, treaties, procedures. In May 2026, this means working simultaneously on three levels – naming the EU's treaty violation, ratifying Bilaterals III, and accelerating the diversification strategy (Mercosur, India, GCC). Outrage alone is not foreign policy.

Pacta sunt servanda – this principle applies to Brussels as well as Bern. And it is not a reason to avoid treaties, but the only reason why one concludes them at all.

This article is based on the interview with Federal President Guy Parmelin on the SRF Saturday Review of May 16, 2026, with Philipp Burkhardt, NZZ reporting by Christina Neuhaus, Fabian Schäfer, Antonio Fumagalli and Katharina Fontana, as well as the LinkedIn discussion of May 16/17, 2026.

Sources:

Verification Status: ✓ 18.05.2026

Tags: #ModusVivendi #BilateralsIII #GuyParmelin #UrsulaVonDerLeyen #SteelTariffs #CrossBorderCommuters #Section232 #TreatyCompliance #Liberalism #SimonMichel #HanspeterTschäni #SwitzerlandEU #Cassis #%C5%A0ef%C4%8Dovi%C4%8D #WTO

This text was created with the assistance of an AI model. Editorial responsibility: clarus.news | Fact-checking: 18.05.2026

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