Swiss Tariff Damage Grows as Firms Plan Job Cuts, Relocations

(Bloomberg) — Switzerland’s manufacturing slump is worsening as companies consider job cuts and relocating production in response to damaging US tariffs, piling pressure on the government to get better trade terms.

More than 30% of companies are planning to shift operations to the European Union because of the levies President Donald Trump imposed on the country, trade group Swissmem said Tuesday. Many are also considering short-time work or layoffs.

The 39% US tariff on Switzerland is the highest imposed on any developed nation and poses a major threat to businesses and the economy. Swiss officials are trying to remedy the situation with a new offer to the US, aiming to get a new deal by October. US Treasury Secretary Scott Bessent has indicated that the US wants to wrap up outstanding negotiations with countries by then.

“We are currently in a dangerous downward spiral, and the knock-on effect is being accentuated by the US tariffs,” Swissmem Director Stefan Brupbacher said. “This is a dramatic situation for the affected companies, employees and regions.”

While economists still forecast growth for the Swiss economy, businesses and executives have struck a more cautious tone, and a number of them have started implementing emergency plans. Lindt & Spruengli AG, for instance, is weighing moving production of its world-famous, gold-wrapped Easter bunnies.

In addition to the tariffs, Swiss exporters also have to contend with a strong currency. The franc has gained more than 12% against the dollar this year, one of the best performers versus the greenback.

The economy is highly dependent on exports, and runs a large goods trade surplus with other nations. That is partly driven by its pharmaceutical sector, dominated by giants Roche Holding AG and Novartis AG. The drugmakers discussed the situation with the Swiss government earlier this month.

Swissmem, which represents the export-oriented mechanical and electrical engineering industries, called on the government to do all it can to reduce costs for businesses. It also said Switzerland should focus on building trade ties with the EU, which already accounts for almost half the country’s exports. The body represents more than 1,000 companies from small and midsized firms to large corporations.

According to its report, manufacturing orders plunged 13% in the second quarter compared with the previous three months, with overall sales declining for a ninth consecutive quarter. Swissmem expects the downturn to accelerate in the coming months.

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