Switzerland faces shock as Trump slaps record tariffs on chocolate watches

Switzerland, renowned for its longstanding neutrality and tradition of quiet diplomacy, has suddenly found itself targeted in the latest escalation of Donald Trump’s erratic trade war. In a move that stunned both policymakers and business leaders in Bern, the United States has imposed a 39 percent tariff on a wide range of Swiss exports, including iconic products such as chocolate and luxury watches.

For over two centuries, Switzerland’s foreign policy has revolved around avoiding entanglements. Yet these new tariffs leave it with some of the highest import rates in the United States, almost on par with nations like Syria, Laos and Myanmar, and considerably worse than Taliban-governed Afghanistan which faces a relatively lighter 15 percent duty. The timing of the tariff announcement, landing on Switzerland’s National Day, added to the sense of national affront.

Jan Atteslander of the business lobby Economiesuisse expressed disbelief at the suddenness of the decision. “We are among the United States’ most open economic partners. We have no tariff or non-tariff barriers for US goods or services and we’re a top investor in America. To wake up and find ourselves in this position is really a shock,” he said. Data underscores the surprise, with Switzerland recording a trade surplus of £28.8bn with the US last year, exporting £47.6bn in goods from precision instruments and medicines to world-famous Nespresso pods.

The steep tariff jump—from an initial 31 percent introduced in April to the present 39 percent—will hit all but pharmaceuticals and gold. Swiss president Karin Keller-Sutter is leading an urgent delegation to Washington for talks, after an unsuccessful phone call attempt to resolve the matter directly with President Trump. Trump has conditioned tariff relief on Swiss pharmaceutical companies lowering their drug prices, a point expected to dominate negotiations in the coming days.

The repercussions for the Swiss economy could be grave. Nikolay Markov at Pictet Asset Management has revised his estimates, warning that the tariffs could wipe out up to 1.8 percent of Switzerland’s growth, dragging the economy into technical recession and potentially costing thousands of jobs. With American-bound exports representing 15 percent of total Swiss trade, manufacturers are bracing for widespread disruption. Chocolatiers, for whom the US is a major marketplace, predict that incurring tariff and exchange rate impacts could increase costs by as much as 55 percent since the year’s start.

The relative leniency extended to the UK, with a 10 percent tariff, and the European Union’s 15 percent, leaves Swiss firms at a severe competitive disadvantage. Business leaders like Roger Wehrli, who leads industry associations for Swiss chocolatiers, warn that many might be forced to leave the American market altogether if the punitive rates remain. Stockpiled products might soften the impact temporarily, but if the situation is not resolved, even giant brands such as Swatch and Victorinox could be forced to rethink their strategies and potentially seek ways to bypass tariffs, such as routing exports via Slovenia, an EU member with friendlier rates.

Swiss officials remain committed to seeking an accommodation. The federal council has offered to present the US with a more attractive arrangement in a bid to avert severe damage to its export sector and labour market. The coming weeks may prove decisive for the Alpine nation’s economic trajectory as it attempts to navigate this unprecedented challenge.