Swiss Exports Face Headwinds from Tariffs and Strong Franc
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Swiss Exports Face Headwinds from Tariffs and Strong Franc
- Swiss exports to the United States experienced a significant downturn in the third quarter, with an 8.2% slump following the imposition of 39% tariffs by the US in August 2025.
- The strong Swiss franc has consistently posed challenges for export-oriented companies, making Swiss products more expensive for international buyers and reducing competitiveness, a trend observed since at least 2015 when the fixed minimum euro-to-franc exchange rate was removed.
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Switzerland’s export-driven economy, renowned for its “Swiss Made” quality in sectors like watches, machinery, and pharmaceuticals, is currently grappling with significant challenges from both US tariffs and the persistent strength of the Swiss franc.
In August 2025, the United States imposed substantial tariffs of 39% on a range of Swiss goods, severely impacting exports. This led to an 8.2% decline in Swiss exports to the US in the third quarter of 2025, with watch exports to America more than halving in September 2025, a 56% decrease. While the tariffs were later reduced to 15% in mid-November 2025, aligning with the rate applied to European Union products, the initial high tariffs created considerable disruption. The pharmaceutical industry, a major component of Swiss exports to the US, was initially exempt but faced risks of future tariffs. In the first quarter of 2026, Swiss exports to the US fell by 15.6% quarter-on-quarter, with the pharmaceutical sector experiencing a 9.3% decline. By July 2026, US tariffs on Swiss goods stood at 12.5%, 2.5 percentage points higher than those for EU-origin imports, raising concerns among Swiss industrial companies about a competitive disadvantage.
Concurrently, the strong Swiss franc has made Swiss products more expensive in international markets, posing a continuous challenge for exporters. The franc’s appreciation, particularly against the euro since 2000, has put pressure on profit margins and competitiveness. This ongoing strength of the franc, a “safe-haven” currency, attracts foreign capital but can penalize the export-oriented economy, requiring companies to increase productivity or potentially move some production abroad to remain competitive. The combination of these trade barriers and currency strength contributes to an uncertain economic outlook for Switzerland’s export sector.