The White House announced on Friday that the US was imposing a whopping 39 percent tariff rate on imports from Switzerland – making it the worst tariff deal in Europe. So why has Switzerland been hit with such a high rate?
Customs duties were increased for dozens of countries after Donald Trump signed an executive order on Thursday evening, but Switzerland is one of the heaviest hit, with imports to the US set be taxed at 39 percent.
This tariff is higher than the 31 percent levy originally announced in April, and also higher than the Swiss government had hoped after negotiations with the Trump Administration.
It is also far higher than the 15 percent levy on EU goods that Trump agreed with EU chief Ursula von der Leyen on Sunday.
The EU promised a lot of money in energy and weapons spending to secure its deal and even though Switzerland probably also presented the US with major investment plans, this didn’t pan out.
So what’s going on?
Swiss president Karin Keller-Sutter, who is also finance minister, spoke with Trump on Thursday and wrote on X that “the trade deficit [between the US and Switzerland] remains the centre” of Trump’s preoccupation.
Ich hatte heute ein letztes Gespräch mit US-Präsident Trump vor dem Ablauf der Frist für die US-Zölle. Für den Präsidenten steht das Handelsdefizit im Vordergrund. Es konnte keine Einigung über die zwischen der Schweiz und den USA verhandelte Absichtserklärung gefunden werden. pic.twitter.com/qXwPCueovY
— Karin Keller-Sutter (@keller_sutter) July 31, 2025
The trade balance was heavily in Switzerland’s favour at 40 billion Swiss francs ($49 billion) last year.
But Swiss daily Blick said that these figures ignore tech companies, such as Meta and Alphabet, explaining that the deficit would actually ‘only’ be 18 billion Swiss francs if you took those into account.
Trump has also ignored the two countries’ wildly different market sizes, the paper explained.
Nine million people in Switzerland spend significantly more per capita on US products than the more than 340 million Americans spend on Swiss products, Blick said.
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Accusations of currency manipulation are another possibility. The US has previously accused Switzerland of currency manipulation by its national SNB bank: if the SNB weakens the Swiss franc, then Swiss companies can, of course, export more cheaply.
However, since Trump’s tariff threats, the Swiss franc has actually appreciated against the dollar, making this a less likely reason.
Making a deal with Switzerland also isn’t a high priority for Trump as Switzerland accounts for only 1.3 percent of US imports.
So could it be the pharmaceuticals industry? Trump has previously accused Switzerland of unfair practices, which Blick said probably means the country’s huge pharma industry. The US president is well known for wanting to cut high healthcare costs in the US given Americans pay some of the highest drug prices in the world.
On Friday, Trump issued an ultimatum in a letter to the heads of 17 of the world’s largest pharmaceutical companies – including the CEO of Novartis – stating that they had 60 days to lower prices or they will feel his full power.
If companies refuse to comply by September 29th “we will use every tool in our arsenal to protect American families from continued abusive drug-pricing practices,” the letter stated.
Swiss pharmaceutical giants Roche and Novartis have both announced plans to invest tens of billions of dollars in the United States in the coming five years as they try head off threats by Trump to impose separate tariffs of up to 200 percent on medicines if foreign drugmakers don’t move more production into the United States.
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But an agreement “is still possible”, US finance minister Scott Bessent said, so negotiations could take place before the tariffs come into effect on August 7th.
The legal route may be a further option for Switzerland if any negotiations fail.
“I am convinced that these tariffs are illegal,” Thomas Cottier, professor emeritus of European and International Economic Law at the University of Bern told Blick, adding that he was certain that the tariffs violated the rules of the World Trade Organisation (WTO).
Switzerland could file a complaint with the WTO, but even if this was successful, the Alpine country is too small to exert pressure on the US on its own and other countries were unlikely to join in support, Cottier explained.
