Switzerland, the land of luxury brands, could see prices skyrocket from
Trump's 39% tariffs
[August 02, 2025] By
STEFANIE DAZIO
Prices for the eponymous Swiss watches, Swiss chocolate and Swiss cheese
could skyrocket in a week as a result of U.S. President Donald Trump’s
trade war.
Switzerland, home to some the world's most recognizable luxury brands,
now faces an upcoming 39% tariff from the U.S. Industry groups on Friday
warned that both Swiss companies and American consumers could pay the
price.
Trump signed an executive order Thursday placing tariffs on many U.S.
trade partners — the next step in his trade agenda that will test the
global economy and alliances — that's set to take effect next Thursday.
The order applies to 66 countries, the European Union, Taiwan and the
Falkland Islands.
In Switzerland, officials failed to reach a final agreement with the
U.S. after Trump initially threatened a 31% tariff in April. Swiss
companies will now have one of the steepest export duties — only Laos,
Myanmar and Syria had higher figures, at 40-41%. The 27-member EU bloc
and Britain, meanwhile, negotiated 15% and 10% tariffs, respectively.
Figure came as a surprise
The Swiss government spent Friday — the country’s National Day — reeling
from the news. Swiss President Karin Keller-Sutter said that the 39%
figure was a surprise, because negotiators had hashed out a deal last
month with the Trump administration that apparently wasn't approved by
the American leader himself.
“We will now analyze the situation and try to find a solution,"
Keller-Sutter told reporters. “I can’t say what the outcome will be, but
it will certainly damage the economy.”
The U.S. goods trade deficit with Switzerland was $38.5 billion last
year, a 56.9% increase over 2023, according to the Office of the United
States Trade Representative. Keller-Sutter said that she believes Trump
ultimately chose the 39% tariff, because the figure rounded up from the
$38.5 billion goods trade deficit.
“It was clear that the president was focused on the trade deficit and
only this issue,” she said.
Time is ticking for watch companies
For Swiss watch companies, whose products already come with price tags
in the tens of thousands — if not the hundreds of thousands — of euros,
a timepiece for an arm could cost a leg, too, come next week.
The 39% figure was especially galling to the Federation of the Swiss
Watch Industry, because Switzerland in 2024 got rid of import tariffs on
all industrial goods.
“As Switzerland has eliminated all custom duties on imported industrial
products, there is no problem with reciprocity between Switzerland and
the U.S.,” the federation said in a statement. “The tariffs constitute a
severe problem for our bilateral relations.”
Swiss watch exports were already facing a prolonged slowdown, with
significant declines in the United States, Japan and Hong Kong,
according to the federation's June figures, the most recent available.
Swatch and Rolex declined to comment Friday. Representatives for Patek
Philippe, IWC and Breitling didn't respond to requests for comment.
[to top of second column] |
Nespresso cartons on display at the Nestle's own supermarket, in
Vevey, Switzerland, Thursday, Feb. 13, 2020. (Laurent Gilliero/Keystone
via AP)
 Sour taste for Swiss chocolatiers
Multinational chocolatiers Nestlé and Lindt & Sprüngli said they
have production lines in the U.S. for American customers. But small-
and medium-sized Swiss companies are predicted to suffer under the
tariffs.
Roger Wehrli, chief executive of the Association of
Swiss Chocolate Manufacturers. also known as Chocosuisse, said
Switzerland exports 7% of its chocolate production to the U.S.
It's not just the 39% tariff that's the issue. Once the
manufacturers factor in the exchange rate between U.S. dollars and
Swiss francs ($1 to 1.23 francs on Friday), Wehrli said, it's close
to a 50% increase in costs for the Swiss companies. And that's a big
number to pass on to American consumers, if the already-slim margins
aren't further reduced.
“I expect that our industry will lose customers in the United
States, and that sales volumes will decrease heavily,” he told The
Associated Press.
Wehrli said that he wants Swiss chocolatiers to sell to other
markets around the globe to make up the difference. Still, he hopes
American customers remember that Swiss quality beats cheaper
quantity.
“I think even if prices for Swiss chocolate increase due to the very
high tariffs, I think it’s worth (it) to buy Swiss chocolate," he
said. “It’s worth (it) to really eat it consciously and to really
enjoy it instead of eating a lot.”
Tough pill for Swiss pharmaceuticals
Swiss pharmaceuticals powerhouse Roche says that it's working to
ensure its patients and customers worldwide have access to their
medications and diagnostics amid the Trump tariff war.
“While we believe pharmaceuticals and diagnostics should be exempt
from tariffs to protect patient access, supply chains and ultimately
future innovation, we are prepared for potential tariffs being
implemented and confident in managing any impacts,” the statement
said.
The company in April announced that it plans to invest $50 billion
in the United States over the next five years, creating 12,000 jobs.
The company already employs more than 25,000 people in the U.S.
Meanwhile, Novartis, another major Swiss pharmaceutical firm, said
in a statement that it was reviewing Trump’s executive order.
“We remain committed to finding ways to improve access and
affordability for patients,” it said.
___
Pietro De Cristofaro in Berlin, and David McHugh in Frankfurt,
Germany, contributed to this report.
All contents © copyright 2025 Associated Press. All rights reserved |
