Switzerland has expressed disappointment over the United States’ decision to impose a 39% tariff hike on Swiss goods, more than double the 15% rate applied to most European Union imports. The Swiss government said it would try to negotiate its way out of the stiff tariffs, which are set to go into effect on August 7.
In a statement on social media, the Swiss government expressed regret over the US decision, stating, “The Federal Council notes with great regret the intention of the US to unilaterally burden Swiss imports with considerable import duties despite the progress made in bilateral talks and Switzerland’s very constructive position.” The government remains in contact with US authorities and hopes to find a negotiated solution.
The Trump administration’s decision to impose the 39% tariff rate is aimed at addressing what it calls a “continued lack of reciprocity in our bilateral trade relationships.” According to a White House official, “Switzerland, being one of the wealthiest, highest-income countries on Earth, cannot expect the United States to tolerate a one-sided trade relationship.”
The new tariffs will likely prove painful for several key Swiss industries, including manufacturing and watchmaking. Swissmem, a group representing the mechanical and electrical engineering industries, expressed shock at the US move, stating, “It’s a massive shock for the export industry and for the whole country.” Deputy Director Jean-Philippe Kohl added, “The tariffs are not based on any rational basis and are totally arbitrary… This tariff will hit Swiss industry very hard, especially as our competitors in the European Union, Britain, and Japan have much lower tariffs.”
The tariffs have also sparked concerns about the impact on Swiss companies and American consumers. Industry groups have warned that both Swiss companies and US consumers could bear the brunt of the tariffs. For instance, Swiss watch exports had already been affected prior to the latest news, with a surge in the spring when Trump threatened a 31% levy, followed by a decline on hopes of a settlement at a lower rate.
The tariffs could require price increases of more than 20% in the US, according to Jefferies analysts. Swiss luxury stocks are expected to come under significant pressure when trading begins. Shares of Watches of Switzerland Group Plc fell as much as 6% after the US president imposed the 39% tariff on imports from Switzerland.
The Swiss pharmaceutical industry may also be affected, although the Trump administration has not imposed tariffs on pharmaceuticals. Companies like Roche and Novartis have stated that they are working to ensure access to medications and diagnostics amid the trade tensions.
The new tariffs have created uncertainty in global markets, with many details unclear. European stock markets are poised for a lower open, with futures pointing to declines across most major bourses. The STOXX 600 index was down 1.8% on the day and 2.5% on the week, on track for its biggest weekly drop since Trump announced his first major wave of tariffs on April 2. Wall Street also opened sharply lower.
Kristen Saloomey reported from the New York Stock Exchange that US markets were “definitely down” following the tariffs announcement, but the drop was not as bad as what was seen after the first round of tariffs in April. Economists say the market has priced in tariffs, but concerns remain about the underlying fundamentals of the economy and the full weight of the tariffs.