HomeInsightsAnalysis

Analysis

Trade Tensions Test Swiss Resilience

US tariffs weigh on Swiss exports, but services and resilience keep growth positive. Explore scenarios for GDP, trade risks, and portfolio implications for investors.

Swiss Economy: Tariffs Weigh, Outlook Resilient

According to the SECO’s (Swiss State Secretariat for Economic Affairs) flash estimate, Swiss GDP growth slowed to 0.1% q/q in Q2 2025 from a robust 0.8% in Q1, after the US introduced 10% tariffs on Swiss goods in April. Manufacturing contracted, but resilience in services kept the economy in positive territory, better than many had expected.

Key drivers of the slowdown

  • Tariffs are biting: The effective tariff rate on Swiss exports to the US rose sharply, with watches alone accounting for a third of the USD 500m duties collected in Q2.
  • Trade balance shift: Switzerland’s surplus with the US flipped to a modest deficit, partly due to shifts in gold trade.
  • Policy risk remains: The US has since raised tariffs to 39% as of August (excluding gold and pharma). Negotiations are still ongoing, leaving the outcome uncertain.

Possible Scenarios

  • Baseline: GDP growth at 1.3% in 2025 and 1.0% in 2026. Services, policy support, and structural resilience provide a buffer.
  • Downside: If the 39% tariffs persist, growth could fall by up to 0.4pp, with exports to the US dropping around 25%.
  • Upside: A negotiated reduction in tariffs by year-end could restore trade flows and support stronger growth momentum into 2026.

Portfolio implications

For investors, this episode reinforces two lessons:

  • Diversification remains essential against unpredictable trade shocks.
  • Switzerland’s services, pharma, and luxury sectors continue to anchor stability.
Stacked bar chart of Switzerland's quarterly goods trade balance with the US from Q1 2020 to Q2 2025, in CHF bn, split into net pharmaceutical exports, net gold exports, other exports and other imports. The surplus stayed at roughly CHF 5–20bn until a surge in net gold exports lifted it to just under CHF 50bn in Q1 2025. It then fell to a small deficit in Q2 2025 as gold flows reversed.
Two panels covering January to June 2025. The US effective tariff rate on Swiss goods stayed well below 1% from January to March, rose to nearly 3% in April and to just under 5% in May and June. The share of Swiss goods exports to the US subject to tariffs was about 5% or less until March, then jumped to about 40% in April and about 50% in May, before easing slightly in June.

This article is general market commentary, not investment advice or a personal recommendation. The value of investments can fall as well as rise, and past performance is not a guide to future returns. Written and reviewed under our editorial standards.

More insights

All insights

Begin with a conversation about what your wealth is for.

Thirty minutes with an adviser who will ask about your family, your plans and the years ahead before anything else. No obligation.

Start a conversationSee how we charge