Switzerland Stunned by Surprise 39% U.S. Tariff, Triggering Economic Alarm

Zurich  — Switzerland was left reeling Friday after the U.S. announced a surprise 39% import tariff on Swiss goods, set to take effect on August 7, shocking industry leaders and trade officials alike.

The move, unveiled while Switzerland observed its national holiday, deviates sharply from expectations that the Alpine nation would finalize a moderate tariff agreement similar to deals struck with the EU, U.K., and Japan. Instead, the U.S. imposed one of the highest rates globally, threatening key Swiss export sectors, from luxury watches to advanced manufacturing.

“This decision puts tens of thousands of jobs in the industry at risk,” said Stefan Brupbacher, Director of Swissmem, the country’s top manufacturing association. The group called the measure “arbitrary” and warned of serious impacts on Switzerland’s tech and export-driven economy.

The tariff excludes the pharmaceutical sector, a partial relief given its scale, though analysts warn that overall GDP could shrink by 0.6% or more if additional sectors are included. The U.S. accounts for roughly one-sixth of Swiss exports.

Swiss officials said they "deeply regret" the decision and are actively pursuing a negotiated solution. Rahul Sahgal, CEO of the Swiss-American Chamber of Commerce, said the development was “disappointing” but held out hope, citing open language in the U.S. executive order that could allow flexibility for countries still in negotiation.

Market reaction was swift. London-listed Watches of Switzerland dropped nearly 9% in early trading, while the Swiss franc slid 0.4% against the U.S. dollar.

Economists warn the abrupt move may damage investor confidence and weaken the franc, which has already appreciated by 11% this year amid global uncertainty.

While Switzerland has pledged potential U.S. investments worth $150 billion, similar to commitments made by the EU, it remains unclear whether that will be enough to ease tensions ahead of the looming tariff deadline.

“This is not the end,” Sahgal said. “There is still time, and we’re hoping for a breakthrough.”