Tariffs hit key Swiss export sectors
The Swiss National Bank (SNB) warned Thursday that escalating U.S. tariffs pose a significant challenge for Swiss exporters, particularly those in high-value sectors like machinery and watchmaking. Following the imposition of a 39% tariff by the U.S. in August — among the highest implemented by the Trump administration — Swiss authorities acknowledge the pressure facing domestic industry.
This tariff followed a failed trade negotiation in Washington led by Swiss President Karin Keller-Sutter, signaling a breakdown in bilateral talks. SNB Chairman Martin Schlegel described the tariffs as a “major challenge” during a press conference, highlighting the risk they pose to both export volumes and business sentiment.
Economic growth outlook downgraded
While Switzerland’s broader economy is expected to absorb the shock without falling into recession, the SNB has revised down its growth expectations for 2026. Previously forecasting 1% to 1.5% growth, the central bank now sees expansion of “just under 1%” as a likely outcome for that year. Petra Schudin, a governing board member, cited the significant impact of U.S. tariffs on both exports and business investment.
Despite the downgrade, the SNB maintained its key interest rate at 0%, as widely anticipated. Schlegel emphasized that monetary policy will continue to play a supportive role in maintaining economic stability, particularly in the face of external trade headwinds.
Exporters bear the brunt, but broader economy remains stable
While Schlegel acknowledged that exporters are facing a particularly “challenging” period, he expressed confidence that the Swiss economy as a whole would remain resilient. The SNB currently projects GDP growth of 1% to 1.5% in 2025, with no immediate risk of recession.
Industries most vulnerable to the tariffs include those tied closely to U.S. markets, particularly Swiss machinery and luxury watch manufacturers — long-standing pillars of the country’s export economy. These sectors face heightened uncertainty, which could dampen both short-term orders and long-term capital investments.
SNB sticks to dovish stance amid external risks
The SNB’s decision to hold rates reflects a cautious approach amid growing global trade tensions. While inflationary pressures remain subdued, the central bank signaled its readiness to act if economic conditions deteriorate further. Monetary policy, in this context, is being used not just to maintain price stability but also to buffer the effects of international trade shocks.
As 2025 approaches, Swiss policymakers are expected to closely monitor the impact of U.S. tariffs while also adjusting to broader shifts in global trade patterns, central bank strategies, and geopolitical alignments.
