Swiss stocks decline under the impact of Trump's tariff-induced fury
The trade relations between Switzerland and the United States have become strained following the imposition of a 39% tariff on Swiss imports by the US government, effective from August 7, 2025. This tariff, announced by former President Donald Trump, targets Swiss imports including pharmaceuticals.
Switzerland, however, denies claims of unfair trade practices and has been actively responding to the situation. The Swiss government continues negotiations with the US in a bid to secure fair treatment and to remove or reduce these tariffs. The Swiss Federal Council and trade negotiators are maintaining close contact with affected sectors and US officials, though details of negotiation offers remain confidential.
The impact of the US tariffs on Swiss pharmaceutical companies and the broader Swiss economy has been significant and negative. The tariffs represent a serious shock, especially for Switzerland’s export-oriented industries, including pharmaceuticals and machinery. Industry representatives warn of massive job cuts and some companies have announced short-time work due to the tariffs. The tariffs have been described as an "attack on Switzerland" by key industry groups, reflecting fears of a damaging economic ripple effect.
Switzerland's leading pharmaceutical companies have suffered selloffs as a result. For instance, Roche fell 1.83% to 252.10 francs, while Novartis shares suffered a 1.36% loss, trading at 92.91 francs. Pharmaceutical manufacturing company Lonza Group fell 1.61% to 562.80 francs, and chocolate maker Nestle suffered a 0.21% loss, trading at 70.95 francs.
In addition to economic consequences, these tariffs have had political ramifications. The tariffs have strengthened arguments within Switzerland for closer ties to the European Union as a counterbalance to US trade pressures. The tariffs have intensified debates around Swiss foreign policy and bilateral treaties with the EU, highlighting the geopolitical dimension of these trade tensions.
Upon opening this morning, the Swiss Market Index dropped by 1.9% to 11,835 francs. However, it later eased its losses to trade at 1.54% down. The Swiss franc also fell against the dollar on Monday by 0.7% to $1.24 and for a second time against the euro, dropping 0.3% on top of a 0.5% loss on Friday to €1.07. Investors were forced to wait to access their stocks over the weekend due to a national holiday on Friday.
The ongoing negotiations between Switzerland and the US are crucial in determining the future of trade relations and the economy of both countries. Switzerland remains committed to seeking fair treatment and resolving this trade dispute.
Summary of key points:
- US tariff rate on Swiss goods: 39%, targeting Swiss imports including pharmaceuticals
- Swiss response: Ongoing negotiations aiming to secure fair treatment and remove or reduce tariffs
- Economic impact: Shock to Swiss export industries, risk of job losses, short-time work announced; described as an "attack"
- Negotiation status: Ongoing but details confidential; Swiss offer includes defense procurements from the US
- Political impact: Boosts push for closer Switzerland-EU ties amid trade tensions with the US
- The ongoing trade tensions between Switzerland and the United States, prompted by a 39% tariff on Swiss imports, have caused significant losses in the Swiss stock market, particularly in the pharmaceutical sector.
- The political repercussions of these tariffs have also been evident, with arguments strengthening within Switzerland for closer ties to the European Union as a counterbalance to US trade pressures.
