Tariff hammer could hit Swiss industry to the core

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• US President Trump has ordered 39% tariffs on Swiss exports - significantly more than for EU countries.
• The watch and machine industry as well as cheese and chocolate exports are coming under massive pressure.
• Economists expect a decline in GDP - and warn of long-term damage to Switzerland as a business location.

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The US tariff hammer has given Switzerland a shock: US President Donald Trump has ordered a 39% tariff on Swiss imports. "Everyone's prosperity is at risk," warned Swissmem, the industry association for the tech industry.

The tariffs will be paid by importers and US consumers, but this will make "Made in Switzerland" so expensive that orders are likely to collapse, the industry feared. The USA is Switzerland's most important export market, accounting for almost 19 percent of total exports.

The industry association Economiesuisse warned of company bankruptcies. Swissmem Director Stefan Brupbacher saw tens of thousands of jobs at risk. Also because competitors from the EU are "only" subject to 15 percent US tariffs.

The Economic Research Center (Kof) of the ETH University in Zurich calculated a decline in Swiss gross domestic product of 0.3 to 0.6 percent with 39 percent tariffs. If the pharmaceutical industry, which has so far been exempt, were to be added to this, it would probably be at least 0.7 percent.

Who is most affected in Switzerland:

The watch industry

Swiss watches are very popular with the wealthy in the USA: Rolex, Breitling, Tag Heuer - these and similar brands have already been seen on the wrists of Donald Trump and other billionaires in his cabinet.

Kif-Parechoc employees produce gears for mechanical watches in Le Brassus VD, photographed on Monday, January 20, 2025.

KEYSTONE

No other country exports as many Swiss watches as the USA: pieces worth CHF 4.3 billion in 2024, followed by China with CHF 2 billion. The US share of watch exports is 16.8 percent.

Chrystel Graf, President of the State Council of the Canton of Neuchâtel, speaks of a "club blow". Her canton, with the towns of La-Chaux-de-Fonds and Le Locle, is regarded as the cradle of Swiss watchmaking and has produced brands such as Omega, Longines, Tissot and Audemars Piguet.

Machine industry

Swiss companies are among the world market leaders in some areas with precision machines and components: special excavators, inspection equipment for checking pipelines or sensors for factory automation, for example. However, if the competition can deliver more cheaply due to high tariffs, they may lose out.

Chocolate and cheese

Maestrani, a manufacturer of chocolate specialties that is more than 170 years old, sees the worst. "If these tariffs were to be applied permanently, we would no longer be competitive in the US market," said Valentin Haag, Head of Marketing.

Swiss chocolate will now be significantly more expensive in the USA.

Archive image: sda

The customer would have to pay the customs duties, making Maestrani chocolates significantly more expensive than competing products from the USA or the EU. However, the sales partners still have stocks. Maestrani premium chocolate can already cost four euros for 100 grams.

In the case of Gruyère cheese, 13 percent of production goes to the USA, more than 4300 tons last year. "This business is acutely endangered", reports the magazine "Schweizer Bauer". The Gruyère AOP variety organization is expecting a slump in sales and has already decided to cut production.

Gruyère production at Emmi in Moudon VD: cheese exports are also likely to suffer.

KEYSTONE

The tariffs are less of a problem for large companies such as Lindt & Sprüngli and Nestlé. They produce for the US market in the USA - Nestlé says more than 90 percent.

The problem of gold

Gold exports to the USA have risen massively, possibly as a reaction to the uncertainty of the markets and geopolitics, as the precious metal is considered a safe haven for wealth.

According to the Federal Office for Customs and Border Security, 475 tons went to the USA in the first half of the year, compared to 153 tons in the whole of last year. From January to June, this amounted to 39.2 billion Swiss francs, 54 percent of exports to the USA in terms of value. The gold is practically only remelted in Switzerland, without much added value.

Currency problem

The dollar has been weakening since Trump took office. The Swiss franc is also considered a safe haven and has risen significantly, by around 14% since January. This makes exports more expensive. This is exactly what Trump wants: "You make a hell of a lot more money with a weaker dollar," he said recently.