Why Trump’s tariffs are forcing Switzerland to rethink future of Swiss Army knife

The tariff shock now threatens to make the knives more expensive than European competitors and forces the company into a tangle of customs red tape

In Ibach-Schwyz, the Alpine town where Swiss Army knives have been produced for generations, the assembly line remains busy. Workers still snap blades, corkscrews and scissors into place before sealing them in the iconic red case stamped with a silver cross. But the mood has shifted. US President Donald Trump’s sudden decision to impose a 39% tariff on Swiss imports — the steepest levied on any Western ally — has left Victorinox, the knife’s maker, staring at a $13 million US tax bill next year, the New York Times reported.

Why the tariffs matter

For decades, the United States has been Victorinox’s biggest market. Its knives have become symbols of Swiss craftsmanship, popularized by American soldiers after World War II and by pop culture through shows like MacGyver. The tariff shock now threatens to make the knives more expensive than European competitors and forces the company into a tangle of customs red tape. What was once a smooth trade relationship has suddenly become a bureaucratic ordeal.

Swiss officials scramble for solutions

The broader Swiss economy is also rattled. Watchmakers, chocolatiers and tool manufacturers are feeling the pinch, with some pausing sales or considering moving production abroad. Switzerland’s economy minister, Guy Parmelin, rushed to Washington to negotiate a new deal, while luxury executives even turned to soft diplomacy — Rolex invited Trump to its VIP box at the US Open finals. The urgency reflects how deeply Switzerland’s export-led model depends on stable access to the US market.

An identity dilemma for Victorinox

Victorinox’s chief executive, Carl Elsener Jr., says the company has explored shifting some final stages of production, such as packaging or cleaning professional knives, to America to ease the tariff burden. But the core product, he insists, cannot be made outside Switzerland. “It’s a Swiss icon inseparably tied to the promise of ‘Made in Switzerland’ quality,” Elsener said. “Moving its production abroad would undermine the very essence of our brand.” For him, survival may mean compromise, but never at the cost of identity.

Ripples through Swiss industry

The tariffs are biting just as the strong Swiss franc has made exports pricier. Swiss Army knives, once subject to a modest 4.5% duty, now face import costs of nearly 44% when combined with Trump’s steel tariffs. Victorinox has so far kept US prices steady, thanks to stockpiling inventory, but price hikes loom in 2026 if no deal is reached. Other industries, from watches to chocolate, are also cutting back or furloughing workers, underlining the wider strain on Switzerland’s open economy.

A family business under pressure

Victorinox has endured crises before. Founded in 1884, the company grew from a small workshop to a global brand, producing 10 million pocket knives and 20 million professional blades each year. Its resilience has always rested on long-term planning — building reserves in good times to weather shocks. Elsener says that lesson still applies: “I’m hoping for the best, but I’m also prepared for the worst.” But this time, the challenge is not just financial. It is about preserving the Swiss Army knife’s very identity in a world of shifting trade rules.