3 Apr 2025

What could "Liberation Day" mean for Switzerland?

Switzerland is famous for its cheese, chocolate and gold. The Trump Administration’s decision to impose a 31% tariff on Swiss goods seems largely driven by the trade deficit, specifically a formula based on the 2024 trade deficit.

Unfortunately, using 2024 data is problematic - especially given that the trade deficit spiked in that year, largely due to an increase in gold exports - which distorted the numbers. Gold exports surged as demand from the US increased, contributing a substantial boost to the trade deficit in 2024. If that spike had not occurred, the tariffs might have been closer to 26%.

The real wild card is how the Swiss government will respond to protect its economic interests and how the pharma and chemical sectors will be impacted by the possible extension of tariffs across those industries.
— Manfred Elsig