Untere Schleuse picket bridge in Thun, Switzerland.
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Switzerland’s authorities on Thursday minimize its 2026 financial forecast for the nation, citing the Trump administration’s punitive tariffs as a “heavy burden” on its industries.
Officers held their forecast for the Swiss economic system to develop by 1.3% this yr, however famous that this stage of financial development was “considerably below-average” for the nation. For subsequent yr, they’re now forecasting gross home product (GDP) development will sluggish to 0.9% – down from a earlier 2026 forecast of 1.2% development.
“Larger U.S. tariffs have additional clouded the outlook for the Swiss economic system,” officers stated in a information launch on Thursday.
Switzerland is an export-driven economic system, and the U.S. was the highest international vacation spot for its items in 2024. Again in August, Switzerland was hit with 39% tariffs on items despatched to the U.S. after a Swiss delegation did not safe a cope with U.S. officers — one of many highest country-specific rates imposed by the Trump administration.
The nation’s largest exports embody watches, prescription drugs and valuable metals — however the nation can be famend for its luxury goods, chocolate and skincare products. Branded and patented pharma merchandise are newly subject to 100% tariffs upon entry to the U.S., until their producers have or are constructing manufacturing amenities in America.
Swiss officers stated in Thursday’s replace that beneath present commerce circumstances, international demand for Swiss items and providers is predicted to rise “solely modestly” within the coming quarters.
“The present commerce coverage atmosphere presents specific challenges for Switzerland,” they stated. “The extra tariffs are inserting a heavy burden on affected sectors and export-oriented corporations, with important ripple results anticipated throughout the broader economic system. Furthermore, persistent uncertainty can be dampening financial exercise.”
The federal government additionally warned that almost all of America’s different buying and selling companions had been granted decrease tariff charges, inserting Swiss exporters at a aggressive drawback within the U.S. market. White Home commerce coverage held important affect over the long run trajectory of Switzerland’s economic system, they stated.
“If Switzerland have been to succeed in an settlement with the U.S. or if worldwide commerce coverage have been to ease, a extra favorable growth can be anticipated,” they stated. “General, nevertheless, draw back dangers presently dominate.”
Past Trump’s tariffs, demand for the Swiss franc can be including to Switzerland’s financial and diplomatic woes, with the forex – sometimes seen as a protected haven asset in occasions of broader volatility – gaining greater than 12% this yr amid lingering uncertainty. The rising franc has created headwinds for the nation’s central financial institution by placing downward strain on costs as policymakers battle to keep away from disinflation and adverse rates of interest.
U.S. greenback/Swiss franc
Officers stated on Thursday that the Swiss franc was persevering with to play a job in Switzerland’s financial challenges – and cautioned {that a} additional strengthening of the franc was attainable.
“A deterioration within the worldwide atmosphere can’t be dominated out,” they stated, noting that dangers associated to a market correction, international sovereign debt and the geopolitical panorama continued.
“Ought to any of those dangers materialize, additional upward strain on the Swiss franc can be anticipated,” they stated.
Dangers are mounting
Charlotte de Montpellier, senior economist, France and Switzerland at ING, instructed CNBC on Thursday that “dangers for the Swiss economic system are mounting.”
“Its publicity to the US market is massive, amounting to 4% of GDP,” de Montpellier stated in an e-mail. “I estimate a cumulative direct impression of the present enhance of US tariffs to 39% on Swiss GDP of about 0.86% within the first two years.”
De Montpellier just lately revised her personal development forecast for Switzerland for 2026 right down to 0.8% – nearly half the expansion charge she was forecasting at the start of this yr.
“I consider that the danger are tilted to the draw back and the probability of getting 1 / 4 of adverse development has strongly elevated,” she stated. “The Swiss economic system, lengthy buoyed by pharmaceutical exports, now faces a interval of heightened uncertainty that can result in a pointy deceleration of exercise momentum.”
Melanie Debono, senior Europe economist at Pantheon Macroeconomics, stated on Thursday that the brand new forecasts from the Swiss authorities have been in step with her personal.
“A fall in items exports, as indicated by month-to-month nominal items commerce figures, coupled with falling funding — in gentle of the surge in uncertainty and regardless of [Swiss National Bank] charge cuts, which is able to in the end feed via to decrease rates of interest confronted by companies — means we anticipate the Swiss economic system to enter recession within the second half of this yr,” she instructed CNBC through e-mail. “We predict Swiss GDP will fall by 0.2% quarter-to-quarter in each Q3 and This fall.”
‘Horrible information’ for corporations
Talking to CNBC’s Carolin Roth on Wednesday, Georges Kern, CEO of Swiss luxurious watchmaker Breitling, labeled the U.S. tariffs “horrible information” for Switzerland.
“39% tariffs is horrible,” he stated. “Nonetheless, I consider it is going to be solved. Swiss politicians are actually understanding the best way to cope with businesspeople. The Trump administration, these are businesspeople, these should not traditional politicians … However I am assured that throughout the subsequent couple of weeks there will probably be a a lot better answer than the 39%.”
Kern stated that because the tariffs got here into impact, Breitling had hiked costs globally to offset the impression, noting that luxurious manufacturers had extra flexibility on this regard.
“[In] the U.S. we elevated costs 4%, but in addition worldwide to steadiness the price of the tariffs since you can’t simply enhance costs to the patron by 39%,” he defined. “Thank god now we have a sure pricing energy at our value level, I do not suppose it is going to impression us dramatically, truly we’re rising.”
