Why Trump has targeted Switzerland with steep tariffs and what it means for trade

Why Trump has targeted Switzerland with steep tariffs and what it means for trade

US President Donald Trump’s decision to impose a 39% tariff on Swiss imports — one of the highest in the world — has stunned a country long known for its neutrality, luxury goods and high-end manufacturing. The move has raised a central question from Zurich to Geneva: Why Switzerland? For decades, the two nations have spoken of “excellent” relations, but the White House says the trade balance tells another story, the New York Times reported.

The trade gap at the heart of the dispute

America’s goods trade deficit with Switzerland reached $38 billion last year and nearly $48 billion in the first half of 2025, driven mainly by a surge in gold imports. Gold refining is a dominant Swiss export to the US, with bars shipped from London to Swiss refineries and then recast to American specifications before being exported. Excluding gold, pharmaceuticals — from giants like Roche and Novartis — make up roughly half of Swiss exports to the US, worth about $35 billion in 2024. Precision machinery, luxury watches and specialty foods like chocolate and cheese also feature prominently.

Trump’s pressure on key industries

Trump has warned that the global pharmaceutical sector could face steep tariffs unless drugmakers cut US prices and expand production in America. Swiss drugmakers have already pledged billions in American investments. Precision toolmakers, who sell about $12 billion in goods to US manufacturers, call the tariff threat a “horror scenario.” The luxury watch industry, led by Rolex, Patek Philippe, Swatch and Richemont, sends over $5 billion in timepieces annually to the US All now face sharply higher costs in their top foreign market.

Frictions behind the “special relationship”

Despite warm official rhetoric, US-Swiss ties have been punctuated by disputes. Washington has long criticized Swiss banking secrecy and past tax-evasion cases, and more recently has been frustrated by Bern’s slow adoption of sanctions on Russia. In April, Swiss negotiators thought they had a deal to avert high tariffs, but the White House went ahead with an even steeper 39% rate. WikiLeaks cables and recent comments from US officials suggest Switzerland can be “difficult to deal with” in trade talks.

Switzerland’s options to ease the tariffs

Bern is now exploring concessions similar to those offered by other countries that secured lower tariffs — including announcing or repackaging major US investment pledges. Roche has promised $50 billion in American R&D and manufacturing investments, while Novartis has committed $23 billion over five years. Switzerland could also boost US liquefied natural gas imports, expand military purchases beyond its 2021 deal for F-35 fighter jets and Patriot missiles, or cut gold exports to the US

The political calculus in Washington

For Trump, targeting Switzerland underscores his broader push to punish countries running large surpluses with the US It also allows him to pressure the global pharma industry while projecting a tough trade stance ahead of the election. Swiss officials, meanwhile, are mobilizing their so-called “Mar-a-Lago Crew” of executives with personal ties to the president to lobby for relief.

What comes next

Negotiations are expected to intensify in the coming weeks, with Switzerland seeking to translate investment promises into tariff reductions. For now, the 39% duty threatens to disrupt supply chains in multiple industries, potentially raising prices for American consumers while forcing Swiss exporters to rethink their US strategies. Whether the dispute ends in a deal or deepens into a lasting rift will depend on how much Bern is willing to offer — and how much political mileage Trump sees in keeping the pressure on.