It’s quite a twist for Switzerland, a nation known for its neutrality, to find itself caught off guard by President Trump’s latest tariff decision. This alpine country, with its world-famous chocolate, watches, and strong stance on staying out of trade skirmishes — including those involving the EU — simply didn’t see it coming. Having recently scrapped industrial tariffs on imports, Swiss firms play a significant role in the U.S., supporting around 500,000 American jobs.
So when tariffs shooting up on Swiss imports were announced midweek, the Swiss were taken aback. The real kicker was the number itself, which seemed to be up for debate: Was it 31% or 32%? With differing figures coming from the White House and the U.S. Trade Representative, even the Swiss government seemed in the dark. Swiss President Karin Keller-Sutter expressed her bewilderment and vowed not to reciprocate with similar tariffs, opting instead for dialogue to hopefully negotiate a better outcome.
The Swiss, typically composed, couldn’t help but feel affronted. The U.S.’s rate on Swiss goods surpassed the EU’s 20% and dwarfed Britain’s minimum 10%. For Swiss products like chocolate bars or medical devices, it meant tariffs more than 20% higher than those on their British equivalents — baffling the Swiss, who had zero tariffs on imports, including American ones. This led Jean-Philippe Kohl from Swissmem, representing the country’s tech manufacturers, to voice his confusion.
Switzerland’s investments in the U.S., ranking highly, predominantly stem from pharmaceutical giants like Roche and Novartis. For now, pharmaceuticals and the gold trade have dodged these tariffs. However, Trump’s hints at including them in the future keep many on edge. The shockwaves of these tariffs are already being felt across Swiss industries, from chocolate to cheese.
Daniel Bloch, CEO of Chocolats Camille Bloch, a heritage chocolatier, spoke of the challenges. His traditional chocolates, popular with the Orthodox community in the U.S., will see prices soar from $3 to as much as $5, a steep increase that might deter buyers. The speed of these changes has left him scrambling for solutions, and communication with his U.S. distributor has been fraught.
Reflecting on the sudden turn, Bloch remarked that it feels as though Switzerland has been unexpectedly categorized as an export “offender.” Meanwhile, the Swiss watch industry, a significant export sector, is adjusting their pricing strategy. Georges Kern from Breitling remains optimistic, suggesting the dust will settle soon enough despite the turbulence.
However, other Swiss manufacturers, especially smaller tech and machinery firms, are understandably unnerved. With U.S. competitiveness waning, they are looking towards emerging markets like India, South America, and China. Jean-Philippe Kohl emphasized the growing importance of these regions in light of the current situation.
Switzerland’s reluctance to engage in tariff tit-for-tat with the U.S. is clear, particularly to shield their pharmaceutical sector from potential repercussions. Economists speculate the tariffs are part of a broader goal to address the trade deficit, which was substantial in recent years.
Swiss companies, particularly those rooted in the region’s renowned craftsmanship, balk at the idea of relocating production stateside. Victorinox, known for its Swiss Army Knife, is committed to maintaining its Swiss identity, rejecting any notion of shifting operations.
Although the list of affected Swiss exports is not exhaustive, about 30% fall under these new tariffs, pointed out Reto Föllmi from the University of St. Gallen. The impact on smaller manufacturers, despite producing luxury items that allow some price elasticity, is significant.
Ultimately, the question remains: Who bears the cost — American consumers or the companies, which might even consider leaving the U.S. market? Daniel Bloch hopes to retain his U.S. footprint, albeit emotionally strained by the unpredictability of the market, once deemed a stable and reliable partner.
