Switzerland’s economic growth slowed sharply in the second quarter as exports fell after companies rushed to stockpile goods ahead of steep new US tariffs, official data showed Friday.
The export-reliant country’s economy grew 0.1 percent in the April-June period compared to the first quarter, when it expanded by 0.8 percent, according to the economy ministry.
“The negative performance in industry has been counterbalanced by gains in the services sector,” the ministry said in a statement.
Growth had accelerated in the first three months of the year as shipments of pharmaceutical goods to the United States, a major export, surged in anticipation of President Donald Trump’s tariff onslaught.
READ ALSO: US tariffs for Switzerland – What we know about them so far
“Growth slowed significantly in Switzerland in the second quarter as tariff front-running eased,” said Adrian Prettejohn, a Europe economist at London-based research firm Capital Economics.
“We suspect the slowdown will have been most acute in the pharmaceutical industry, after firms rushed to exports goods to the US in the first quarter,” he said.
Trump imposed a “baseline” 10-percent tariff on imports from around the world in April and warned that dozens of countries, including Switzerland, would face even higher levies.
Swiss goods exports fell 5.3 percent in the second quarter compared to the first three months of the year as shipments of chemical and pharmaceutical products fell, customs data showed last month.
Watch exports, however, jumped in April as US importers rushed to build their stocks after Trump warned that Switzerland could be hit with a 31-percent tariff.
Trump shocked Switzerland by signing off on an even bigger duty of 39 percent on the country on August 1, more than double the tariffs that were imposed on its European Union and Japanese competitors.
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The Swiss government is still hoping to negotiate a lower tariff after last-ditch talks in Washington failed to change the US government’s mind.
While pharmaceutical products have been spared so far, the US leader has threatened to hit the entire sector with tariffs of as much as 250 percent if drug prices do not drop.
“The economy is likely to expand only slowly the next couple of quarters as high US tariffs and elevated business uncertainty weigh on exports and investment,” Prettejohn said.
