Neutral No More? US Tariffs Drag Switzerland Into a New Trade War Era

Key Highlights

• Switzerland’s tariff shock exposes how Trump’s trade strategy targets even “neutral” economies.
• Bern wins a deal lowering U.S. tariffs from 39% to 15%, still far above pre-2025 levels.
• The episode accelerates Switzerland’s push for deeper EU ties to shield its export-heavy economy.

For a country famed for its calm neutrality, Switzerland has unexpectedly become the biggest European casualty of Trump’s revived tariff-first trade strategy. When Washington imposed a 39% tariff on Bern in August, the highest applied to any European nation, many in the Swiss government were stunned, according to reporting in the Swiss newspaper Neue Zürcher Zeitung.

Why Switzerland Became Trump’s Biggest European Target

Why Switzerland? Trade analysts note that Bern sits outside the EU customs union, meaning it does not automatically benefit from Brussels’ tariff shields or quota allocations. That makes Switzerland unusually exposed when Washington redraws its tariff map. Add to this the country’s high-value export profile, which includes pharmaceuticals, precision machinery, gold, metals, and speciality coffee. Marking Switzerland as a convenient target in the White House’s campaign to “rebalance” trade relationships.

As seen in earlier Trump-era moves against France, Germany, and China, the strategy is less about bilateral imbalances and more about strategic signalling: rewarding allies that align with US industrial priorities and penalising those who sit outside major trade blocs. Switzerland, despite its neutrality, fell straight into the latter category.

A Deal at Last: Switzerland Secures EU-Parity but Still Faces Long-Term Pain

After months of pressure, Bern and Washington reached a preliminary agreement to reduce the tariff from 39% to 15%, the same rate imposed on EU exporters. Swiss chief trade negotiator Helene Budliger Artieda, head of the State Secretariat for Economic Affairs (SECO), described the agreement as “a good deal” compared with the earlier shock, as reported by Reuters.

But she was blunt about expectations, “I’m afraid we won’t get back to the tariffs we had at the start of the year, even if Democrats return to power,” she told NZZ. At the start of 2025, the average US tariff on Swiss goods was just 2.5%-3%.

The US government shutdown and Thanksgiving have delayed the implementation, but Bern expects the new tariff schedule to take effect in mid-December.

The End of Economic Neutrality? Switzerland Braces for a New Trade Reality

The episode has triggered a deeper anxiety in Bern: economic neutrality no longer guarantees safety. Switzerland largely escaped earlier rounds of US trade aggression thanks to exemptions on pharmaceuticals, gold, and coffee, some of its biggest exports. But the Trump administration’s second-term trade doctrine appears more aggressive, broader, and less predictable.

In practice, smaller wealthy economies without the backing of major blocs may find themselves increasingly vulnerable. Switzerland, long reliant on bilateral deals, now confronts the possibility that geopolitics has eclipsed neutrality in trade policy.

Counting the Costs: How Swiss Exporters Will Absorb Higher Tariffs

SECO estimates Switzerland will carry a trade-weighted tariff burden of about 7% under the new structure. While this is significantly lower than the earlier 39% shock, it still reshapes the outlook for exporters, especially those outside the pharmaceutical sector.

Budliger Artieda said Switzerland would save around $6 billion per year compared with the previous situation, but industries dealing in metals, machinery, and luxury consumer goods will remain under strain.

Exporters also face the ripple effects of tariff uncertainty, including longer contract negotiations, higher insurance premiums, and weaker pricing power in the US- Switzerland’s second-largest export market after the EU.

Why Bern Is Now Leaning Closer to the EU

The tariff shock has accelerated an internal shift in Bern toward closer European integration. Switzerland has already approved a suite of new agreements with Brussels, which are expected to head to parliament early next year before a national referendum.

For Budliger Artieda, the calculation is clear: “For the export sector and the labour market, the advantages clearly outweigh the disadvantages.”

In other words, in a world of weaponised tariffs, belonging to or tightly aligning with a powerful trade bloc may be the only reliable shield. Switzerland’s era of comfortable economic neutrality is ending, and the US tariff shock may be the event that finally forces Bern to pick a side.