Zurich — Switzerland’s top leadership is in crisis mode after the United States abruptly slapped a punishing 39 percent import tariff on Swiss goods, sparking fears of a looming economic hit to one of Europe’s most export-reliant economies.
Swiss President Karin Keller-Sutter and Economy Minister Guy Parmelin departed for Washington in an urgent diplomatic push to renegotiate trade terms before the new tariffs take effect on August 7, 2025. The pair will present what Bern has called a “more attractive offer” aimed at averting a tariff regime that risks damaging Switzerland’s manufacturing and pharmaceutical base.
The tariff announcement by US President Donald Trump stunned Swiss policymakers. Up until last week, Swiss officials had believed they were on the verge of a deal resembling those signed with the UK, EU, and Japan, where import duties were capped at 10 to 15 percent. Instead, Switzerland now faces the steepest trade penalty imposed on any Western partner by Washington.
Swiss Economy and Industry Under Threat
The sectors targeted include luxury watches, precision machinery, chocolate, and potentially pharmaceuticals, though the latter may remain temporarily exempt. According to Swiss trade data, the United States is the second-largest destination for Swiss exports, and the newly imposed duties would affect more than 60 percent of outgoing goods.
Swiss watchmakers like Richemont and Swatch saw their shares plunge between 3 to 5 percent following the announcement. Analysts at Credit Suisse forecast that if fully implemented, the tariff could knock 0.5 to 1.1 percent off Switzerland’s GDP. Major industry associations warned that tens of thousands of jobs could be jeopardized if Swiss exports become uncompetitive in the US market.
Political Backlash at Home
At home, Swiss President Keller-Sutter faces increasing political backlash. Swiss media have labeled her previous phone call with US President Trump a “diplomatic failure”, accusing her of entering the discussion unprepared. During the 30-minute call, Trump is said to have repeatedly cited Switzerland’s $48 billion trade surplus, offering little room for negotiation and rejecting proposals that failed to immediately reduce that imbalance.
Even members of Switzerland’s traditionally neutral political center have expressed concern. Some opposition leaders claim that the current administration underestimated the risks of dealing with an aggressively protectionist US leadership, while others blame Switzerland’s pharmaceutical lobby for triggering the confrontation.
Strategic Options Narrow
While retaliatory tariffs are currently ruled out, Swiss officials are reportedly preparing an emergency package of economic sweeteners to offer Washington. These include expanded LNG imports, increased investment in US infrastructure projects, and possible market access concessions in finance and insurance.
But many experts warn that such measures may not be enough. “Switzerland is now being punished not for protectionism, but for its success,” said Marc Lehmann, an international trade analyst at ETH Zurich. “This is about leverage — and Switzerland has precious little at this point.”
The optics of the Swiss leadership flying to Washington under pressure have not gone unnoticed, with some in Brussels and Berlin quietly pointing to it as evidence of Europe’s waning ability to stand up to US economic blackmail.
A Multipolar World and US Pressure
The move comes amid intensifying global trade realignments, with many nations deepening ties with BRICS countries to hedge against Western economic coercion. Russia, China, and Iran have all openly criticized Washington’s weaponization of tariffs, and Switzerland’s plight may further erode confidence in US-led trade architecture.
For now, the world watches as the Swiss delegation prepares for high-stakes talks in Washington, hoping to salvage what’s left of bilateral trust and prevent long-term economic harm.
According to the Financial Times, the unprecedented tariff was triggered by US President Trump’s belief that Switzerland’s trade practices unfairly favored its export sector without offering equivalent access to US goods. The article noted that Swiss officials had initially believed they had secured a 10 percent cap, but were blindsided by the White House’s decision to impose the full 39 percent rate.
It also confirmed that Swiss President Keller-Sutter and Economy Minister Parmelin are set to meet US trade representatives and possibly Trump himself in Washington before the tariffs formally take effect on August 7. The FT detailed the escalating crisis and how Switzerland’s diplomatic strategy may now determine the fate of several key export sectors.
