If the Swiss Army knife is made in America, is it still Swiss?

The United States has long been Victorinox’s most important market. Lea Meienberg/The New York Times

In the vast Alpine factory where Swiss Army knives are made, workers fixed finely sharpened blades onto stainless steel plates. Corkscrews, mini-scissors and can openers were clicked into place. Sealed in a bright red case and stamped with a silver cross and shield, a “Made in Switzerland” icon was born.

Carl Elsener Jr., the CEO of Victorinox, which makes the famed pocket tool, smiled at the craftwork and pointed proudly to a photo of former US President George H.W. Bush and his wife, Barbara, touring the factory during a visit in the late 1990s and assembling their own knives by hand.

The United States has long been Victorinox’s most important market, Elsener said, raising his voice above the din of machinery. But after President Donald Trump blindsided Switzerland last month by imposing a 39% import tariff, the highest for any Western country, the treasured ties were thrown into question.

“It was a shock,” said Elsener, who, like many Swiss executives, had anticipated an outcome more like that of the European Union, which negotiated a 15% tariff, or Britain, which was slapped with a basic tariff of 10%. “No one had expected such a drastic step,” he added.

Carl Elsener Jr., CEO of Victorinox. Lea Meienberg/The New York Times

After decades of easy entry into America, a wall has gone up for the Swiss. If the tariffs stay in place, Victorinox will face a $13 million (CHF10.3 million) US import tax bill next year. After keeping US prices steady this year, Elsener may have to raise them. The company’s professional kitchen knives suddenly cost more than those of European competitors. And US customs paperwork, once simple, is now a Kafkaesque ordeal.

“The new tariffs are hitting Switzerland’s export-oriented economy hard,” said Jan Atteslander, a director at EconomieSuisse, the lobbying group for Swiss businesses. “A swift agreement on reducing tariffs is essential.”

The shock has set off an unexpected identity crisis in this orderly nation. Companies like Victorinox are weighing whether they move some parts of their production to America and still retain their Swiss essence. Switzerland’s principles of independence and neutrality are being tested, forcing a reevaluation of its relationship with the EU. Above all, the Swiss are left with a burning question: Why did this happen to us?

‘Prepared for the worst’

Swiss officials are scrambling to placate Trump, who has singled out countries that he says treat Americans “unfairly” by exporting more goods to the United States than they buy; he has also railed against Switzerland’s $39 billion trade surplus. Swiss Economics Minister Guy Parmelin rushed to Washington this month with what he called a “better offer” for a new trade deal. Jean-Frédéric Dufour, head of Swiss luxury watchmaker Rolex, even invited Trump to the company’s VIP box at the US Open men’s finals in New York in a bid at soft diplomacy.

But like the Swiss Army knives he makes, Elsener, who is the fourth generation in his family to run the company, is staying pragmatic. “I’m hoping for the best, but I’m also prepared for the worst,” he said in an interview at Victorinox’s headquarters in Ibach-Schwyz. It is a bucolic industrial region in central Switzerland ringed by pine-covered mountains and dotted with timbered houses, colorful church spires and the occasional herd of cows.

The term “Swiss Army knife” was coined after World War II by US soldiers who brought Victorinox’s pocketknives back home. Their popularity skyrocketed among consumers, who used them to slice food at picnics or untie knots on muddy boots. The 1980s television series MacGyver, about an action hero who carried one everywhere, cemented its cult status.

Victorinox sells to 120 countries, but the US tariffs have put increasing pressure on the company. The Swiss franc, a haven in turbulent times, has surged against the dollar and the euro, pressuring its pricing and margins. When Trump began talking about tariffs after his inauguration in January, Elsner grew alarmed.

“I immediately ordered our team to put full steam on production and fill up inventory in the United States,” he said. Some of his US managers resisted, fearful of a huge backlog of Swiss Army knives. “I told them, ‘Just do it,’” he said. “If something dramatic happens, at least we will be prepared.”

That foresight has allowed Victorinox to maintain prices despite Trump’s surprise tariff. But the company is studying price increases for 2026 in case a deal to lower the tariff fails. It is also looking to new markets in Asia and India to bolster sales.

‘Tremendous bureaucracy’

The hit is painful after decades of paying a low 4.5% tariff rate. Now, Victorinox’s total import tax is nearly 44%. On top of that, the US dollar has slid an additional 12% against the Swiss franc since Trump took office, sending the cost of Swiss goods even higher.

And then there are Trump’s 50% tariffs on steel. Swiss Army knives once passed through the US border without complication. “Now, we have tremendous bureaucracy for every knife,” Elsener said.

The company must weigh every component, from the blades to the corkscrews, and report the data along with the steel’s origin. “We also have to say where the steel is melted, and where did that company get its melting blocks,” he said.

The impact is starting to ripple through the Swiss economy. Watchmakers stung by lower demand have put workers on furlough. Some chocolatiers have paused sales to the United States. Industrial toolmakers are eyeing production in Germany, where tariffs are lower.

Elsener said he was considering shifting some final stages of production, including the cleaning and packaging of professional knives, to the United States, a move that would save $500,000 in tariff charges.

But for him, the Swiss Army knife itself could never be made in America. “It’s a Swiss icon that is inseparably tied to the promise of ‘Made in Switzerland’ quality,” Elsener said. “Moving its production abroad would undermine the very essence of our brand.”

Victorinox

Sprawled across a site the size of six soccer fields, Victorinox is one of Switzerland’s most visible employers, with 1,100 workers crafting high-quality knives, overseeing new designs and running calculations on how to deal with the tariffs.

On a recent afternoon, workers tended to precision machines that make the classic Swiss Army officer’s knife. Specialty models were assembled by hand. Knife blades were stamped out of rolls of coiled stainless steel, while corkscrews and screwdrivers were milled and ground. Inspectors put cutouts of Victorinox’s cross and shield emblem under microscopes before placing them on a red case.

The company started in 1884 when Elsener’s great-great-grandfather, also named Carl, opened a small workshop in Ibach making a dozen knives a week. When the Swiss army announced that it wanted to equip all soldiers with knives, the elder Elsener conceived of a single pocket tool that could do everything from open cans to slice ropes. He won the contract.

After the death of his mother, Victoria, he rebranded operations by combining her name and the French word for stainless steel, inox. In a blaze of foresight, the elder Elsener secured rights to use the Swiss cross and shield symbol forever.

Today, the company manufactures 10 million Swiss Army knives and pocket tools annually as well as 20 million household and professional knives in Ibach-Schwyz. It also makes a line of watches elsewhere in Switzerland; and backpacks and luggage at factories in Asia.

“We have endured wars, depressions and global crises, always guided by the mindset of a family business that thinks in generations, not quarters,” Elsener said. “The lesson is clear: build reserves in good times, so that in hard times you can act and keep investing in the future.”

The New York Times

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