Switzerland Faces Economic Turmoil Amid Trump’s New 39% Tariff

ZURICH, Switzerland (AP) — Swiss manufacturers are expressing serious concerns after U.S. President Donald Trump announced a 39% tariff on Swiss exports, effective August 7. This shocking decision has raised fears of job losses across the country, particularly in export-reliant industries.

The new tariff rate, which more than doubles the previous 15% that most European Union imports face, poses a significant threat to Switzerland’s economy. “It’s a massive shock for the export industry and for the whole country. We are really stunned,” stated Jean-Philippe Kohl, deputy director of Swissmem, the association of mechanical and electrical engineering industries.

The Swiss government had been negotiating with U.S. officials for a more reasonable agreement, previously understanding that a 31% tariff had been on the table. The final tariff announced has left officials and industry leaders perplexed, as they deem it arbitrary and without a solid rationale.

Foreign Minister Ignazio Cassis, speaking at a National Day event, reassured attendees that negotiations would not cease. “We are not discouraged and continue to strive for an agreement in the interests of both sides,” he said.

While most sectors are set to be impacted, the pharmaceutical industry, including major companies Roche and Novartis, has been exempted from the new tariff. Swiss authorities asserted the importance of protecting the pharmaceutical sector from these heavy tariffs, but the industry still faces pressure from the U.S. to lower drug prices.

The Swiss government has initiated discussions with U.S. officials to seek a negotiated solution and address the ramifications this tariff will have on their economy. They noted that despite previous progress in talks, the unilateral decision by the U.S. was a significant setback.

This tariff increase could drop Switzerland’s GDP by approximately 0.6%, according to estimates. Businesses are also bracing for impacts on bilateral relations, as a large portion of Switzerland’s exports go to the U.S., accounting for about one-sixth of total exports.

Stefan Brupbacher, director of the Swiss manufacturing association, emphasized the need for continued dialogue, stating, “This decision puts tens of thousands of jobs in the industry at risk.” Analysts are watching closely, hoping negotiations may still alter the course of these tariffs.