• The US imposes a 39% tariff on Swiss imports, blindsiding negotiators and threatening key export sectors.
  • The Swiss franc weakens slightly, but remains over 8% stronger than pre-tariff threat levels, complicating monetary policy.
  • Swiss businesses brace for significant disruptions, with pharmaceuticals, machinery, and luxury goods hardest hit.

A Sudden Blow to Swiss Trade

Swiss President Karin Keller-Sutter has sharply criticized the US decision to impose a 39% tariff on imports from Switzerland, calling it a move that will have a "very bad effect" on the country's economy. The announcement came after last-minute negotiations failed to produce a deal addressing US concerns over the trade deficit, catching Swiss officials off guard despite earlier positive signals from Washington.

"This decision is deeply regrettable and will harm businesses on both sides," Keller-Sutter said in a statement. Efforts to reach a compromise with President Trump were unsuccessful, leaving Swiss exporters—particularly in pharmaceuticals, machinery, and luxury goods—facing a steep climb to maintain competitiveness in the US market.

Market and Policy Reactions

The Swiss franc dipped 0.2% against the dollar following the news, though it remains significantly stronger than before the initial tariff threats in April. The Swiss National Bank, which had recently ended its easing cycle, was forced to cut interest rates back to zero to mitigate pressure on exporters. Analysts warn that prolonged tariffs could force Swiss firms to rethink their global supply chains.

"The timing couldn’t be worse," said one Zurich-based economist, speaking on condition of anonymity. "With global uncertainty already high, this adds another layer of risk for Swiss trade."

What’s Next?

Switzerland has vowed to continue talks with US authorities while exploring its options under international trade rules. Meanwhile, businesses are scrambling to assess the damage. A major watchmaker, which requested anonymity due to the sensitivity of the situation, said it was "reviewing pricing strategies" but feared losing market share.

Correction: An earlier version of this article misstated the Swiss National Bank's recent policy shift. The bank had previously ended its easing cycle before reversing course post-tariff announcement.