In what’s being described as a seismic blow to Switzerland’s economy, the United States has imposed a crippling 39% tariff on Swiss goods—making them the highest in Europe and the fourth-highest globally, surpassed only by Syria, Laos, and Myanmar. The unexpected escalation has plunged the Swiss government and business community into crisis mode, with shockwaves felt across political and economic spheres.
The announcement of 39% tariffs, which came just hours before the August 1 deadline, blindsided Swiss officials who had been led to believe a much softer tariff regime was on the cards. Swiss President Karin Keller-Sutter, who met with U.S. Trade Secretary Scott Bessent in May, returned optimistic, hinting at a possible 10% tariff—significantly lower than the 31% rate initially floated by President Donald Trump during his “liberation day” announcement in April.
However, hopes were dashed when a final call between Keller-Sutter and Trump failed to yield a breakthrough. Soon after, Washington confirmed the final figure: a punishing 39%.
Swiss media likened the decision to a national humiliation. Blick newspaper called it the country’s biggest defeat since the French triumphed at the Battle of Marignano in 1515. The shock comes after weeks of high diplomatic activity, including Switzerland’s role as host in a US-China mediation meeting in Geneva, which appeared to boost Bern’s standing as a reliable trade partner.
Political analysts and lawmakers are scrambling for answers. While some blame Switzerland’s negotiation strategy—accusing it of being either too accommodating or too rigid—others suggest that size and relevance were the real issues. In Trump’s deal-making calculus, they argue, Switzerland, with a population of just 9 million, simply isn’t a priority.
The U.S. administration cites the $47.4 billion trade deficit (2024 figures) as justification, though that figure drops to $22 billion when services are included—an aspect economists say Trump has ignored. Switzerland is a major exporter to the U.S., shipping pharmaceuticals, machine tools, watches, and gold jewellery. However, its imports from the U.S. remain low, largely due to consumer preferences and incompatibility—American cars are ill-suited for Alpine roads, and U.S. chocolate and cheese aren’t to local taste.
In response to previous U.S. concerns, Switzerland had dropped tariffs on American industrial goods and secured investment pledges from major firms like Nestlé and Novartis to expand operations in the U.S. The country is already the sixth-largest foreign investor in the U.S., contributing to an estimated 400,000 American jobs.
Despite these efforts, the move appears to have had little sway in Washington. Now, with the new tariffs set to take effect on August 7, Swiss officials are racing against time to soften the blow. Business leaders are warning of potential job losses in the thousands, while the government weighs its limited options. These could include retaliatory tariffs, withdrawal of investment promises, or even scrapping Switzerland’s pending purchase of U.S.-made F-35 fighter jets.
Speaking on Swiss National Day, President Keller-Sutter acknowledged that talks had gone well but ultimately faltered over the U.S. focus on the trade deficit. The message was clear: in Switzerland’s view, the obstacle wasn’t the diplomacy—it was Donald Trump.
As the country grapples with the unexpected economic jolt, many are reflecting on Switzerland’s long-standing resilience. Still, the mood is far from celebratory. The feeling on the ground is one of disbelief that one of the world’s most competitive and stable economies is now facing what some describe as economic bullying. Whether innovation and diplomacy can once again steer the country out of crisis remains to be seen.
