Economic Fallout: How the Thirty Nine Percent Tariff Impacts Swiss Key Export Industries

The latest major development is the imposition of new, high tariffs by the United States on Swiss exports, which has fundamentally changed the immediate trade landscape. In August 2025, the US implemented an additional tariff of 39% on a significant portion of Swiss exports. This measure was a stark departure from the positive trajectory of bilateral talks that had been ongoing for months, which had resulted in a draft Joint Statement approved by the Swiss Federal Council in July 2025. The new tariff regime, which is significantly higher than those imposed on competitors like the European Union (15%) and the United Kingdom (10%), has caused deep regret and alarm in Switzerland.

In the wake of these tariffs, the clock on establishing an immediate, comprehensive free trade agreement has effectively been paused. Switzerland, which is a key trading partner for the US, being its sixth largest foreign investor and a major source of high tech, pharmaceutical, and precision goods, is now operating under a distinct disadvantage. The Swiss Federal Council, however, has not halted its diplomatic efforts. It has announced its intention to continue negotiations with the US, seeking a resolution that ensures fair treatment compared to its competitors. Swiss officials, including the Federal President and Vice President, have traveled to Washington to pursue these talks, indicating that while the trade environment is fraught, the diplomatic clock is still ticking.

To mitigate the immediate economic impact of the tariffs, Switzerland has activated its domestic economic measures. These include relying on the instrument of short term working compensation for affected companies to prevent job redundancies. Furthermore, the Swiss government is actively pursuing trade diversification strategies, looking to strengthen ties with other markets globally, as evidenced by its recent engagement with the European Free Trade Association (EFTA) and India. This two pronged approach continuing negotiations with the US while diversifying its global trade network shows that Switzerland is adapting to the new reality.

In essence, the clock for a new comprehensive trade deal may be stalled due to the unilateral US tariffs, but the clock for continued dialogue to resolve the current crisis and find a pathway forward remains in motion. The challenge for Switzerland is to preserve its strong bilateral economic ties with the US while navigating a politically charged trade environment that has put its core export sectors, such as watchmaking and pharmaceuticals, under immense pressure.