U.S. Tariff Shock Slams Swiss Exports to Lowest in Five Years

The United States has imposed a sweeping 39% tariff on Swiss imports, dealing a direct blow to the country’s export-driven economy and weighing on the Swiss Market Index (SMI20.). While pharmaceuticals and gold were spared, sectors such as watches, machinery, and industrial goods are already showing strain. Swiss authorities described the measure as “unilateral additional tariffs,” noting that earlier proposals for a lower 10% rate were rejected by Washington.

Customs data show U.S.-bound Swiss exports plunged 22.1% in August from the prior month, sliding from CHF 4.0 billion to CHF 3.1 billion—the weakest level since late 2020.

Luxury Goods Take the Hit

Watchmakers bore the brunt of the new tariff regime. Exports of Swiss watches to the U.S. fell nearly 9% month over month, highlighting how sensitive the sector is to higher import costs. Gold shipments also declined sharply despite exemptions, underscoring the drag from trade friction and a strong Swiss franc.

Pharmaceuticals and precious metals, which retained exemptions, offered some protection, but exporters in other categories face a difficult combination of rising input costs and reduced U.S. demand.

Export Diversions Cushion the Blow

Despite the sharp drop in U.S. shipments, Switzerland’s overall exports remained relatively steady in August. Firms quickly redirected goods toward the European Union, Canada, and other partners. Germany overtook the U.S. as the top destination for Swiss exports, softening the overall shock.

The government is rolling out export-risk insurance and trade support programs to shield affected industries. Still, business groups warn of job risks in luxury goods, machinery, and mid-sized exporters that rely heavily on U.S. demand.

Policy and Market Implications

The tariff is among the steepest imposed on a developed economy in recent years. For Washington, the move is part of efforts to cut its trade deficit with Switzerland. For Bern, the risk is both economic and political. Larger watchmakers may raise U.S. retail prices, but smaller exporters could struggle to absorb higher costs or reroute supply chains.

Domestically, pressure is building on Swiss leaders to negotiate relief or pursue remedies under international trade rules. In the meantime, the tariff shock adds uncertainty to Switzerland’s trade outlook, with ripple effects already visible in equity performance.

Tips for Traders

• Watch the Swiss Market Index (SMI20.) for signs of stress in export-heavy sectors, particularly luxury goods and machinery.

• Track Swiss customs releases for September and October to gauge whether diversion to the EU offsets U.S. losses.

• Monitor the Swiss franc; a weaker CHF could cushion exporters against tariff headwinds, while continued strength may amplify the shock.

• Keep an eye on Swiss watchmakers and industrial firms—earnings revisions could follow if U.S. demand remains depressed.

• Stay alert to any trade negotiations or exemptions, as policy shifts could quickly alter the export outlook.