Swiss Economy Reels as Trump’s Tariffs Hit Key Exports With 39% Levy
Switzerland Faces Harshest Tariffs in Europe Amid U.S. Trade Crackdown
Switzerland, known for its precision engineering and economic stability, is facing one of the toughest trade challenges in its modern history after U.S. President Donald Trump imposed punitive tariffs of 39% on Swiss goods. The move—among the steepest in Europe and the fourth-highest globally—has sent shockwaves through the Swiss economy and left officials scrambling to renegotiate with Washington.
While other nations have managed to soften the blow—Britain secured a 10% tariff deal and the European Union negotiated a 15% rate—Switzerland, which is not part of the EU, has been left isolated. Efforts to persuade the White House to reconsider have so far failed.
Jan Atteslander, Director of International Relations at Economiesuisse, the Swiss business federation, called the tariffs “unjustified and inexplicable.” He told reporters, “Thirty-nine percent tariffs—I was just shocked. You can’t explain why they are so high.”
A Blow to a Long-Standing U.S.–Swiss Partnership
The decision is particularly painful given Switzerland’s strong economic ties with the United States. Swiss companies are among the biggest foreign investors in the U.S., responsible for creating roughly 400,000 American jobs. Yet since the tariffs were announced on August 1, Switzerland’s export-driven economy has struggled to adapt.
Nearly 17% of Swiss exports are bound for the U.S., making it a vital market that cannot easily be replaced. As the tariffs took effect, Swiss GDP growth began to slow, and business leaders are warning of looming job losses in key sectors.
Pharmaceuticals remain Switzerland’s most valuable export to the U.S. Although they have so far escaped the 39% levy, Trump’s administration has threatened to introduce a 100% tariff on imported medicines—a move that could devastate the sector.
Medical Technology Industry at Risk
Beyond pharmaceuticals, Switzerland’s world-leading medical technology sector is feeling the pressure. The industry, rooted in the country’s famed watchmaking precision, produces advanced medical tools and devices used worldwide.
Adrian Hunn, Managing Director of Swiss MedTech, says the situation threatens a critical ecosystem. “Our medical devices industry evolved from the same precision mechanics that made Swiss watches famous,” he explained. “It’s a deeply integrated network—machines, tools, and expertise all come from here.”
One of the key players is MPS, or Micro Precision Systems, based in Biel—the historic heart of Swiss watchmaking. The company manufactures sophisticated medical instruments such as aortic valve replacements and high-precision surgical drills used in knee and hip replacements—devices vital to an aging U.S. population.
CEO Gilles Robert says their proudest innovation is the world’s only medically registered artificial heart engine, a life-saving device implanted in patients awaiting heart transplants. “It’s a dual-chamber pump that allows people with terminal heart failure to keep living,” Robert said. “Only 120 have been transplanted so far, but each one changes a life.”
Why ‘Made in Switzerland’ Can’t Be Replicated in the U.S.
President Trump has argued that countries hit with tariffs will “eat them” or move production to the U.S. But Robert insists that’s unrealistic for Swiss precision manufacturers. “It would be extremely challenging—if not impossible—to separate production from assembly,” he explained. “These processes require unique skills and machinery that simply don’t exist elsewhere.”
When asked whether MPS could absorb the 39% tariff, Robert was blunt. “We already offered the best price before the tariffs. Our margins are too tight to discount further.”
The result, according to Swiss MedTech’s Hunn, is that American patients will bear the cost. “Medical devices will become more expensive for U.S. hospitals and taxpayers,” he said. “Public healthcare programs will have to cover higher costs, meaning the burden ultimately falls on the U.S. taxpayer.”
Some Firms May Stop Exporting to the U.S. Altogether
Even more worrying is the possibility that some Swiss manufacturers may stop exporting to America altogether. “We’ve already heard from companies saying, ‘Sorry guys, we just stopped delivering,’” Atteslander revealed. “These are firms that make products no one else in the world can match.”
Still, Switzerland has chosen not to retaliate against Washington’s tariffs. As Atteslander puts it, “David can’t realistically fight Goliath.” Instead, the government is aggressively pursuing new trade partners.
Switzerland Looks East for New Trade Opportunities
Despite the pain, Swiss officials are hopeful. A new trade deal with India—the world’s fastest-growing major economy—took effect on October 1, unlocking a market of 1.4 billion consumers. Switzerland also finalized an agreement with South America’s Mercosur bloc, upgraded its trade pact with China, and continues to benefit from free trade with the EU, which accounts for half of all Swiss exports.
“There’s quiet confidence that we’ll weather this storm,” Atteslander said. “To be a successful export nation, resilience has to be in your DNA.”
A Strain on Once-Close U.S.–Swiss Relations
Yet the emotional toll may be lasting. The U.S. was not only a major market—it was a trusted business partner. Many Swiss entrepreneurs viewed their American counterparts as kindred spirits, sharing a belief in free markets and innovation.
That sentiment has now shifted. “I lived six years in the U.S. and have many friends there,” Hunn said. “This hasn’t changed my view of America, but it has changed how I see the current administration’s actions toward allies.”
Robert echoed the same feelings: “I studied in the U.S., and it shaped my entrepreneurial mindset—how to take risks and stay optimistic. So, yes, I’m sad about this situation. But we’ll overcome it. I believe reason will prevail.”
Conclusion: Switzerland’s Strength Lies in Adaptability
While Washington’s tariff war has strained one of the world’s most stable trading relationships, Switzerland’s history of innovation and adaptability suggests it won’t stay down for long. The Swiss may not win a fight against U.S. tariffs overnight, but with global partnerships expanding and world-class industries leading the way, their resilience is already showing.