Switzerland Will Face Trade Fallout Next Year Despite Resilience
(Bloomberg) — Switzerland’s economy will take a hit in 2026 from Donald Trump’s unexpectedly high US trade levy, despite managing to show resilience in the second quarter, officials said.
Data from the State Secretariat for Economic Affairs confirmed growth of 0.1% between April and June, matching an initial estimate. But the 39% tariff that kicked in this month will take its toll.
“Industrial value added and exports declined sharply, whereas the services sector delivered broad-based growth,” SECO said Thursday in a statement. “As a result of higher US import tariffs, the Swiss economy is likely to grow more slowly than previously expected, particularly in 2026.”
A front-loading of sales to the US before trade levies kicked in helped Switzerland record bumper growth of 0.7% in the first quarter. But officials were blindsided by what amounts to the steepest US tariff on a developed nation.
They’re pushing on with efforts to secure a lower rate. Treasury Secretary Scott Bessent has said Washington aims to largely wrap up talks with countries that haven’t secured a trade deal by the end of October.
Analysts reckon Switzerland can so far avoid a recession, with the government planning to boost domestic businesses by cutting red tape. If Trump’s trade measures are extended to include the key pharmaceuticals sector, however, a downturn can no longer be ruled out, Zurich’s KOF research institute has warned.
Help may be on the way from the Swiss National Bank, which could next month become the first central bank to reintroduce negative interest rates after the period of low and subzero borrowing costs that followed the 2008 global financial crisis. About a third of economists surveyed by Bloomberg currently see the benchmark being cut to -0.25%.
Policymakers are reacting to feeble inflation and a surge in the franc in the wake of Trump’s global tariff onslaught. The Swiss currency has gained more than 13% against the dollar this year.
Thursday’s reading is adjusted for large sports events, as revenues of various international competitive institutions based in Switzerland can distort domestic output figures. Without the adjustment, the economy grew by 0.1%.
–With assistance from Kristian Siedenburg, Harumi Ichikura and Joel Rinneby.
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