Key points
- A 39% US tariff on Swiss goods resulted in a 22% decline in August exports to the US compared to July. The Swiss watch industry’s exports are decreasing by 8.6%.
- Increased shipments to Europe, Canada, and Mexico helped offset some of the impact of the US tariffs.
- Total Swiss exports fell by only 1% in August despite the US tariff.
- Ongoing negotiations between Switzerland and the US aim to secure a lower tariff rate.
The imposition of a 39% tariff by the United States on Swiss goods has dealt a significant blow to Swiss exports to its largest trading partner. August figures, the first since the tariff’s implementation on August 8th, revealed a stark 22% decline in Swiss exports to the US, excluding gold, compared to the previous month.
This sharp drop significantly impacted key sectors, particularly the Swiss watch industry, which saw an 8.6% decrease in exports during the same period. The impact was so substantial that gold exports to the US plummeted by 99%.
Despite this substantial hit to US-bound exports, the overall impact on total Swiss exports was less dramatic. A strategic diversification of trade routes proved effective, with increased shipments to other key markets, including several European nations (France, Austria, and Poland), as well as Canada and Mexico, mitigating the negative effects.
As a result, total Swiss exports decreased by a mere 1% in August. This resilience highlights the importance of a diversified export strategy in the face of protectionist trade policies.
The US trade deficit with Switzerland narrowed considerably, falling by roughly a third to CHF 2.06 billion ($2.6 billion) in August, marking the second-lowest level since 2020. This decrease underscores the immediate impact of the tariffs on the flow of Swiss goods into the US market.
However, the Swiss government remains engaged in ongoing negotiations with the US administration, striving to secure a more favorable tariff rate. While US Commerce Secretary Howard Lutnick expressed optimism about reaching a deal, details remain scarce.
These negotiations are particularly challenging for Switzerland, with sensitive agricultural issues adding complexity. Resistance from the Swiss farmers’ lobby to increased imports of American beef and poultry exemplifies the domestic sensitivities involved.
Although Switzerland’s economy has demonstrated resilience thus far, the government anticipates slower growth this year due to the impact of US tariffs. In a strategic move to further lessen its reliance on the US market, Switzerland recently signed a new free trade agreement with the South American Mercosur bloc.
