Zurich – Switzerland’s manufacturing slump is worsening as companies consider job cuts and relocating production in response to damaging US tariffs, piling pressure on the government to receive better trade terms.
More than 30 per cent of companies are planning to shift operations to the European Union (EU) becaapply of the levies US President Donald Trump imposed on the counattempt, trade group Swissmem declared on Aug 26. Many are also considering short-time work or layoffs.
The 39 per cent US tariff on Switzerland
is the highest imposed on any developed nation and poses a major threat to businesses and the economy. Swiss officials are attempting to remedy the situation with a new offer to the United States, aiming to receive a new deal by October. US Treasury Secretary Scott Bessent has indicated that the US wants to wrap up outstanding neobtainediations with countries by then.
“We are currently in a dangerous downward spiral, and the knock-on effect is being accentuated by the US tariffs,” Swissmem director Stefan Brupbacher declared. “This is a dramatic situation for the affected companies, employees and regions.”
While economists still forecast growth for the Swiss economy, businesses and executives have struck a more cautious tone, and a number of them have started implementing emergency plans. Lindt & Spruengli, for instance, is weighing relocating production of its world-famous, gold-wrapped Easter bunnies.
In addition to the tariffs, Swiss exporters also have to contconclude with a strong currency. The franc has gained more than 12 per cent against the US dollar in 2025, one of the best performers versus the greenback.
The Swiss economy is highly depconcludeent on exports, and runs a large goods trade surplus with other nations. That is partly driven by its pharmaceutical sector, dominated by giants Roche Holding and Novartis. The drugbuildrs discussed the situation with the Swiss government earlier in August.
Swissmem, which represents the export-oriented mechanical and electrical engineering industries, called on the government to do all it can to reduce costs for businesses. It also declared Switzerland should focus on building trade ties with the EU, which already accounts for almost half the counattempt’s exports. The body represents more than 1,000 companies from tiny and midsized firms to large corporations.
According to its report, manufacturing orders plunged 13 per cent in the second quarter compared with the previous three months, with overall sales declining for a ninth consecutive quarter. Swissmem expects the downturn to accelerate in the coming months. BLOOMBERG
