Trump's tariff hammer is working These two scenarios threaten Switzerland if the pharmaceutical industry moves away
A new UBS analysis shows that the high US tariffs could noticeably slow down GDP growth. The trend is likely to worsen if the pharmaceutical industry migrates.
09.09.2025, 10:16
09.09.2025, 10:28
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- US tariffs and a weaker dollar could dampen Swiss GDP growth by up to 0.4 percentage points over four quarters, according to a UBS study.
- The export industry will be particularly affected, as Swiss products will become around 50% more expensive in the USA due to tariffs and exchange rate losses.
- UBS does not foresee a recession despite the burdens, but warns of long-term losses.
US President Donald Trump's tariff hammer is also hitting the Swiss economy hard. If tariffs remain at the current level, Swiss GDP growth could be noticeably lower than previously assumed, according to a UBS study.
If the current tariff rate of 39% remains in force, Swiss gross domestic product (GDP) growth could be up to 0.4 percentage points lower than forecast over the next four quarters, UBS wrote in its economic outlook published on Tuesday.
This is because Swiss exports to the USA would become 50 percent more expensive overall, as the 10 percent depreciation of the US dollar would be added to the 39 percent tariff surcharge.
Slight GDP growth forecast
For 2025, the experts continue to expect GDP growth of 1.3% adjusted for sporting events. On an unadjusted basis, the forecast remains at +0.9%.
For 2026, the UBS augurs are still forecasting GDP growth of 0.9% on an adjusted basis. On an unadjusted basis, growth of 1.3 percent is expected. The big bank's economists revised this forecast downwards by 0.1 percentage points at the end of August.
Probably no recession
However, the effects of the customs shock are not so great that they would push the Swiss economy into a recession, they said.
However, this estimate does not yet include any shifts in pharmaceutical production, UBS added. The Swiss pharmaceutical industry is likely to relocate its production for the US market to the United States in the medium term due to the tariff threats.
What is the impact of pharmaceutical development?
The UBS economists have worked out two scenarios. If pharmaceutical companies were to relocate all production for the US market from Switzerland to the USA, the export volume of the pharmaceutical industry would fall by 30 percent. Over five years, this would cost the Swiss economy around a quarter of its growth, the UBS economists explained.
In the second scenario, the rest of the world would be able to compensate for the drop in demand for pharmaceuticals in the USA. As a result, pharmaceutical exports from Switzerland would fall by 17 percent. The Swiss economy would then lose around 15 percent of its growth over the next five years.
