US Tariffs Threaten Up to 20,000 Swiss Jobs, Warns UBS Economist

US Imposes Steep Tariffs on Swiss Exports

The United States has implemented a substantial 39% additional tariff on a wide range of Swiss exports, effective August 7, 2025. This move, announced by US President Donald Trump on July 31, 2025, marks a significant escalation in trade relations between the two nations. The tariff rate is notably higher than the 15% applied to European Union exports and represents one of the steepest penalties imposed on a developed country globally.

The Trump administration cited a 'continued lack of reciprocity' in trade relations and a $38.5 billion goods trade deficit with Switzerland in 2024 as reasons for the tariffs. While existing sector-specific tariffs on products like steel and aluminum remain, key Swiss exports such as pharmaceutical products and gold are generally exempt from the new 39% tariff, though concerns persist about potential future extensions.

Economist Warns of Significant Job Losses

In response to the tariffs, UBS economist Thomas Veraguth issued a stark warning, indicating that up to 20,000 Swiss jobs could be at risk in a 'worst-case scenario'. Veraguth, in an interview with Swiss public television RTS, highlighted the widespread uncertainty across various sectors. Other UBS economists, including Alessandro Bee, Florian Germanier, and Maxime Botteron, have also contributed to analyses, projecting that the sustained 39% tariff could lead to a 0.4 percentage point reduction in Switzerland's GDP growth and place up to 0.4% of jobs in jeopardy.

The tariffs are expected to affect approximately 10% of all Swiss exports. Industries particularly vulnerable include:

• Watchmaking
• Mechanical, electrical, and metal industries (often referred to as the tech industry)
• Luxury goods

Swiss companies could face an estimated loss of $9.5 billion (CHF 7.6 billion) in turnover and $4 billion in profits. The State Secretariat for Economic Affairs (SECO) has also forecast a potential annual GDP decline of up to 0.6%. The umbrella organization for the Swiss economy, Economiesuisse, suggests that as many as 100,000 employees could be directly affected by the trade measures.

Swiss Government Seeks Resolution Amidst Economic Strain

The Swiss government, through the Federal Council, has expressed 'great regret' over the tariffs and is actively seeking a negotiated solution with the United States. Swiss President Karin Keller-Sutter held discussions with President Trump, but these talks did not result in an agreement to lower the tariff rate. Switzerland has notably abolished all industrial tariffs as of January 1, 2024, allowing 99.3% of US goods to enter the country tariff-free.

To mitigate the economic impact and potential job losses, the Swiss government is extending its short-time working compensation scheme. There are also concerns that the tariffs could compel Swiss pharmaceutical giants to establish manufacturing facilities in the US to circumvent the duties, potentially altering Switzerland's trade surplus and long-term economic trajectory. US Treasury Secretary Scott Bessent has indicated that trade talks with non-aligned nations are expected to conclude by October 2025, adding urgency to Switzerland's efforts to secure a more favorable trade arrangement.