In August 2025, former U.S. President Donald Trump announced a sweeping 39% tariff on Swiss imports, one of the highest rates among global trade measures. The tariffs are set to take effect on August 7, 2025, unless Switzerland reaches a new trade agreement with Washington
Swiss officials and business leaders reacted with disbelief, noting the levy came after months of negotiations during which Switzerland expected a more reasonable rate, such as 15% like the EU. The 39% rate ranks only behind a few countries like Laos, Myanmar, and Syria
Diplomatic Fallout as Leadership Faces Criticism
The announcement coincided with Swiss National Day (August 1), catching the government and markets off guard. As a result, Switzerland convened an emergency cabinet meeting on August 4, 2025 to assess options, including revising its trade offer or proposing new concessions
Swiss President Karin Keller‑Sutter faced scrutiny after a high‑profile call with Trump, which critics claim might have unintentionally influenced the decision. She denies any diplomatic misstep, emphasizing that discussions remain ongoing to find a solution
Economic Shockwaves Across Export Sectors
The tariff threatens core export industries—watchmaking, precision machinery, chocolate, and gold—with tens of thousands of Swiss jobs at risk. The U.S. is Switzerland’s largest goods export destination, accounting for roughly 19% of all Swiss exports
Markets responded rapidly: Swiss blue‑chip stocks plunged, high-end brands like Richemont and Swatch saw share declines, and the Swiss franc weakened against the U.S. dollar
Why Switzerland Was Singled Out
U.S. officials linked the tariff level to Switzerland’s sizable trade surplus—about CHF 38 billion (~USD 48 billion)—suggesting a symbolic ratio: 38% surplus → 39% tariff. Trump administration spokespeople cited what they saw as “continued lack of reciprocity” in bilateral trade as a key justification
Despite arranging near‑preferential negotiations with Trump’s team earlier in 2025—including provisional 10% levy treatment during talks—Switzerland was apparently downgraded when no firm commitments were made
Swiss Response: Re-Evaluating Trade Strategy
To mitigate damage, Swiss leaders are exploring several response options:
- Offering to increase investment in the U.S.
- Possibly import U.S. liquefied natural gas (LNG)
- Fast-tracking to negotiate a bilateral Free Trade Agreement (FTA) with the U.S., which had stalled despite being discussed for years
Broader Impact on Luxury Sector
The luxury watch segment, in particular, faces immediate disruption. The tariffs are expected to raise prices on Swiss watches by up to 39%, pushing U.S. consumers toward pre-owned watches, with resale prices predicted to rise 10–35% in the short to mid-term Business Insider. Analysts warn this could reshape the high-end watch market, potentially accelerating demand toward secondary markets.
Outlook: Diplomacy, Trade Tools, and Legislative Pushback
Parliamentarians in both countries now demand more oversight of unilateral tariffs. In the U.S., the newly proposed Trade Review Act of 2025 aims to restrict executive authority to impose tax hikes without approval from Congress . Meanwhile, a U.S. trade court recently ruled that prior “Liberation Day” tariffs exceeded lawful authority under emergency powers, casting doubt on future executive tariff actions
Swiss authorities, facing political and economic pressure, remain committed to negotiating a revised outcome before the August 7 enforcement date.
