Bern gasps in shock as Trump slams Switzerland with one of highest tariff rates

The Swiss government woke up on its national holiday to learn of Donald Trump’s decision to impose a 39 per cent tariff on the country—a steep rate that triggered a 0.4 per cent slide in the Swiss franc on August 1 and left Swiss officials reeling in shock. The government in Bern expressed “great regret” over the decision, which came despite recent efforts to negotiate a trade agreement with Washington.

“It is unclear what the US wants from us,” one Swiss lawmaker said, describing the government as being in a “state of shock.” The news triggered immediate concern from both Swiss citizens and its powerful pharmaceutical industry, according to an article by Financial Times. Switzerland now faces a tariff rate that is only slightly lower than those imposed on countries like Syria, Myanmar, and Brazil, and notably higher than the 31 per cent announced in April during the US “liberation day” tariff wave.

The Swiss franc weakened to SFr0.816 against the dollar, making it one of the worst-performing G10 currencies on the day. In response, the Swiss government reiterated its willingness to maintain dialogue with the US, stating: “Switzerland remains in contact with the relevant US authorities and continues to seek a negotiated solution... in accordance with Swiss and international law.” However, time is tight, with an August 7 deadline looming for talks to resume.

Swiss President Karin Keller-Sutter confirmed on X that she spoke to Trump on July 31. “The president’s priority is the trade deficit,” she noted, adding that efforts to finalise a memorandum of understanding had ultimately failed. The proposed agreement was seen in Bern as a way to pave the way for an early bilateral trade deal, fuelling optimism that has now sharply turned to frustration.

Political backlash within Switzerland was swift and unusually sharp. The Liberal party, a major political force, denounced the move: “With this decision, the US is sabotaging both its excellent, decades-long relationship with our country and free trade as a whole.” This unusually blunt rhetoric underscored just how damaging the announcement is seen across party lines.

Switzerland now finds itself isolated within Europe when it comes to US tariffs. The UK secured a 10 per cent tariff rate, the EU bloc 15 per cent, and even Norway, another non-EU European nation, received the same 15 per cent rate despite having no formal trade deal in place with the US

Trade expert Simon J. Evenett of the renowned IMD Business School in Switzerland’s Lausanne suggested the real motive may be rooted in the sharp rise in Switzerland’s trade surplus with the US in 2024. “Last year saw a 56 per cent increase in the Swiss goods trade surplus,” Evenett said, noting that the original 31 per cent rate was based on 2023 data.

Switzerland exported $60.9 billion worth of goods to the US in 2024, with pharmaceuticals, watches, medical devices, coffee, and especially gold—which accounted for $11.5 billion—making up the bulk of shipments.

By Nazrin Sadigova