Swiss Arms Exports Jump as European Defense Spending Booms

(Bloomberg) — Swiss arms shipments abroad neared an all-time high last year as European defense spending boomed, in a rebound for an industry that feared extinction over the country’s strict export rules.

War material exports surged 43% to 948 million Swiss francs ($1.2 billion) in 2025 from the previous year, the State Secretariat of Economic Affairs said in a statement.

The jump comes after two years of declining sales, during which foreign buyers shunned the Swiss defense industry because Bern blocked the re-export of equipment to Ukraine. That meant local producers missed out on a flurry of orders as Europe rearmed in the wake of Russia’s invasion of Ukraine and doubts over the future of US security guarantees.

Swiss arms producers feared they’d be excluded from European supply chains, with some companies shifting production elsewhere to circumvent the rules.

In 2025, Germany was the main buyer of Swiss war material, spending 386 million francs, Seco said. The US was the No. 2 importer, while European countries accounted for 86% of all purchases.

In December, parliament softened a law — rooted in Switzerland’s neutrality stance — that forbids the re-export of war material with more than 50% of domestically produced components to conflict zones. Industry representatives and the Swiss government have said that easing the rules was necessary to restore trust with foreign buyers.

Still, it remains unclear when the amendment will enter into force as left-of-center lawmakers have said they will challenge it in a referendum.

At the same time, Switzerland’s “armed neutrality” has magnified the importance of the export-dependent sector, which accounts for just over 0.2% of the country’s economic output and about 14,000 jobs. Swiss law enshrines the need to maintain an industrial capacity “adapted to the requirements of its national defense.”

Switzerland is attempting to ramp up it defense spending to 1% of gross domestic product by 2032, which is still substantially lower than pledges by NATO members. The government recently proposed raising the country’s sales tax by 0.8 percentage points for 10 years from 2028 to finance a revamp of outdated equipment.

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