Swiss Exports to US Collapsed in First Month of 39% Tariff

(Bloomberg) — The highest US tariff among developed nations dealt a severe blow to Swiss exports, according to the first reading since the 39% levy took effect.

Foreign sales to America, adjusted for seasonal swings, were 22% lower in August than in July, Swiss customs data showed Thursday. Imports from the world’s biggest economy held steady.

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That narrowed the US trade deficit with Switzerland to 2.06 billion francs ($2.6 billion) — from 2.93 billion francs the previous month — the second lowest reading since 2020.

That gap in goods trade was the reason for US President Donald Trump’s Aug. 1 announcement of the tariff, which took effect on Aug. 8.

A last-ditch attempt by the Swiss government to sway him proved unsuccessful, though talks have continued since and Bern is still pushing to secure a lower rate. US Commerce Secretary Howard Lutnick said last week that Washington will “probably get a deal done with Switzerland” — though he didn’t provide details.

Negotiations with Washington are a balancing act for Swiss negotiators, especially on the issue of agriculture which is domestically sensitive due to a belief in self-reliance. In an interview on Wednesday, the head of the Swiss farmers’ lobby rejected ideas to allow American producers to import more beef or poultry.

Overall, Swiss exports were largely unfazed by the hit to US trade. Higher shipments to European countries — including France, Austria and Poland — as well as Canada and Mexico helped to offset the dent, resulting in retreat of just 1% from a month earlier.

Goods on which the US tariff applies saw significant declines. Compared to July, Switzerland exported 8.6% fewer watches. Pharmaceuticals — so far exempt from the levy — saw a 1.3% decrease.

While the Swiss economy has shown resilience so far, the government said that it expects slower growth this year due to the US levies. Switzerland is trying to diversify its dependencies, including with a new free trade agreement with the South American Mercosur bloc that was signed this week.

–With assistance from Kristian Siedenburg.

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