While announcing a sweeping range of reciprocal tariffs on goods from abroad on April 2nd, US president Donald Trump said customs duties of 31 percent would be imposed on imports from Switzerland. This is what we know so far.
Donald Trump’s tariff on Switzerland is far higher higher than the 20 percent targeting the European Union. Do we know why? How will Switzerland respond and what impact will the tariff have?
Did Switzerland expect such a high customs duty?
At this point we don’t know.
However, the mere fact that the US president imposed tariffs on Switzerland is not a surprise.
“It would be naive to believe that Trump’s strategy would have little or no impact on Switzerland,” Stefan Brupbacher, director of Swissmem, the association of the Swiss machinery, electrical equipment and metals industry, told Swiss media in February.
READ ALSO: Switzerland ‘should prepare for losses’ from Trump’s trade tariffs
How were Switzerland’s tariffs calculated?
Trump said little about the methodology behind the calculations, but based on US media reports, the president “took the trade deficit that America runs with that nation and divided it by the exports that country sent into the United States. Then, because Trump said he was being ‘kind,’ the final tariff number was cut in half.
Why did Switzerland end up with a 31-percent tariff?
Simply put, as Switzerland exports more to the US than it imports from it, this creates a trade imbalance which Trump doesn’t like.
In 2024, for instance, Switzerland exported 52.65 billion francs worth of goods to the United States.
At the same time, imports from across the Atlantic reached ‘only’ 14.13 billion francs. For the United States, the trade deficit thus amounts to 38.5 billion francs.
Therefore, trade between Switzerland and the United States is highly unbalanced, in favour of Bern.
The new tariffs are meant to have a ‘punitive’ effect; they aim to force Swiss companies to curb their exports to the United States or to produce directly on American soil.
In a way of further explanation, Swiss media noted that in his 400-page report, US Trade Representative Jamieson Greer devoted three pages to Switzerland, mentioning that American agricultural products have very limited access to the Swiss market.
The report further points out that subsidies paid by Swiss government to farmers are a competitive disadvantage, as are restrictions placed by the government on genetically modified products.
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Which Swiss industries will be hit hardest by the high tariffs?
First and foremost, the pharmaceutical sector, which accounts for three-quarters of all US-bound exports.
For the past two decades, the share of Swiss pharmaceutical exports has more than doubled, and a big chunk — 28 billion francs — ended up in the United States.
The US is also an important market for luxury watch manufacturers.
According to media reports, “after the shock of the Covid-19 pandemic, the United States became the leading market for Swiss watches,. In 2024, Swiss watchmakers sold 4.47 billion watches in the United States.”
However, the pharma industry could ‘benefit’ from lower tariffs.
While details remain murky at this time (and the government has not yet fully commented on this issue — see more about it below), Watson news platform reported that “the main branches of the Swiss economy will not be uniformly affected by the wave of customs duties.”
This means that the pharmaceutical sector might be subjected to lower duties than 31 percent — possibly 20 percent like the EU — but that will become clearer once the dust settles.
What is certain is that Switzerland’s economy will be affected by the high customs duties, but we don’t know yet to what extent.
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What’s been Switzerland’s reaction to the tariffs?
So far, the only official response came from the Swiss President Karin Keller-Sutter who said on X (formerly Twitter) that the Federal Council “will quickly decide on the next steps,” adding that “the country’s long-term economic interests are the government’s top priority.”
As the Swiss stock market opened in the red on Thursday, Arthur Jurus, Chief Investment Officer of Oddo BHF Switzerland, said the high tariffs “could significantly reduce American demand” for Swiss products like watches and force brands to review their pricing strategies.
“Such a measure would have a direct impact on companies like Rolex, Patek Philippe, and Swatch,” even though the United States is the primary market for Swiss watchmakers.
As for another iconic Swiss product, chocolate, for which the United States represents the second largest market with exports of 605 million francs, the high customs duty “could make these products more expensive for American consumers and lead to a 20-percent drop in sales, representing an estimated annual loss of 300 million francs for Swiss producers.”
