Swiss exports face collapse: US tariffs threaten jobs and GDP

US tariffs have sent shockwaves through Switzerland: US President Donald Trump has imposed a 39 percent tariff on Swiss imports.

“Everyone's prosperity is at risk,” warns Swissmem, the industry association for the tech industry. While importers and US consumers pay the tariffs, this makes "Made in Switzerland" so expensive that orders are likely to collapse, the industry fears. The US is Switzerland's most important export market after Germany, accounting for almost 19 percent of total exports.

The industry association Economiesuisse warns of bankruptcies. Swissmem Director Stefan Brupbacher sees tens of thousands of jobs at risk. This is also because competitors from the EU are "only" burdened with 15 percent US tariffs.

"If the tariff difference remains, it would certainly create an incentive to move to Germany," Hans Gersbach, co-director of the Swiss Economic Institute (KOF) at ETH University in Zurich, told the German Press Agency. He mentions the mechanical engineering, medical devices, precision instruments and pharmaceutical sectors. In addition, there could be production relocations to Germany. At the same time, however, German suppliers to Switzerland would be negatively affected. Overall, this will therefore hardly have any significant impact.

With 39 percent tariffs, the KOF expects a decline in Swiss gross domestic product of 0.3 to 0.6 percent. If the previously exempt pharmaceutical industry were to be added, it would likely be at least 0.7 percent. Swiss President Karin Keller-Sutter travelled to Washington on short notice to try to avert the worst. Those most affected in Switzerland are:

Watch industry

Swiss watches are highly sought after by the wealthy in the US: Rolex, Breitling, Tag Heuer - these and similar brands have been seen on the wrists of Donald Trump and other billionaires in his cabinet. No country imports as many Swiss watches as the US: pieces worth 4.3 billion francs in 2024, followed by China with 2 billion francs. The US share of watch exports is 16.8 percent.

Chrystel Graf, president of the State Council of the Canton of Neuchâtel, speaks of a "heavy blow". Her canton, with the towns of La Chaux-de-Fonds and Le Locle, is considered the cradle of Swiss watchmaking and has produced brands such as Omega, Longines, Tissot and Audemars Piguet.

Gold

Gold exports to the US have risen massively, possibly in response to market and geopolitical uncertainty, as the precious metal is considered a safe haven for assets. According to the Federal Office for Customs and Border Security, 475 tonnes went to the US in the first half of the year, after 153 tonnes in the whole of last year. This amounted to 39.2 billion francs from January to June, representing 54 percent of exports to the US. The gold is practically only re-melted in Switzerland, without much added value.

Currency

The US dollar has been weakening since Trump took office. The Swiss franc is also considered a safe haven and has risen significantly, by around 14 percent since January. This makes exports more expensive. This is quite intentional on Trump's part: "With a weaker dollar, you make a hell of a lot more money," he said recently.

Deficit calculation

Trump speaks of a massive trade deficit with Switzerland. He arrives at a figure of around 39 billion francs. "Absurd", said the Swiss President. Trump is only looking at the exchange of goods. Almost 65 billion francs in Swiss exports were offset by almost 26 billion francs in imports in 2024. However, the US is clearly ahead in the services sector. The overall deficit is therefore around 20 billion dollars.

This article was translated to English using an AI tool.

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