The memorandum of understanding signed between Switzerland and the United States in mid-November marks a significant de-escalation in the bilateral tariff dispute. The arrangement reduces additional US import tariffs on Swiss goods from 39% to 15%, easing immediate pressure on exporters. However, from a trade risk perspective, the agreement stabilizes conditions only partially, while uncertainty remains structurally high.
Tariffs: relief in figures, not a return to normal
The United States is Switzerland’s second-largest export market, accounting for around 17–18% of total Swiss exports. Under the previously announced 39% tariff, competitiveness in key sectors would have deteriorated sharply, particularly in mechanical engineering, precision instruments, watches and the food industry.
According to Coface estimates based on calculations by the KOF Institute, maintaining tariffs at that level could have put 7,500 to 15,000 full-time jobs at risk in the most exposed sectors.
By contrast, limiting tariffs to 15% is expected to reduce Swiss GDP growth by around 0.2 percentage points per year, compared with a significantly larger drag under the earlier tariff scenario.
While this reduction clearly limits downside risk, the current tariff level remains well above pre-dispute conditions and continues to weigh on exporters’ pricing, margins and investment decisions.
Pharmaceuticals: managed exposure, uneven protection
Pharmaceutical products dominate Swiss exports to the United States, accounting for 50.3% of Swiss goods exports to the US in 2024, followed by precious metals trading (22.3%).
Together, pharmaceuticals and chemicals represent around 6% of Switzerland’s gross value added, making the sector systemically important.
The Joint Statement specifies that tariffs imposed under Section 232* should not exceed 15% for originating Swiss pharmaceutical goods.
In practice, the agreement reduces the risk of severe tariff escalation for the sector, especially following earlier threats of tariffs of up to 100% on branded drugs. However, exposure within the pharmaceutical industry remains asymmetric. Large multinational groups with existing US manufacturing capacity or major investment commitments are better positioned to benefit from exemptions, while smaller and mid-sized firms remain more vulnerable to residual tariffs and compliance constraints.
From a risk perspective, this framework could accelerate investment reallocation toward the United States, particularly for future production capacity.
Beyond tariffs: the strategic pillars of the Joint Statement
Although tariffs attracted most attention, the Joint Statement is built around five pillars that shape the broader risk landscape for Swiss companies:
1. Investment and job creation
Switzerland intends to facilitate USD 200 billion in private investment in the US by 2028, with at least USD 67 billion expected within the next year, notably in pharmaceuticals and advanced manufacturing. While supporting market access, this also reinforces the trend toward partial externalization of value creation to mitigate trade risk.
2. Tariffs and market access
The reduction of reciprocal tariffs to 15% and commitments to improve access for US goods stabilize short-term trade flows, but fall short of restoring pre-dispute conditions.
3. Non-tariff barriers
Planned cooperation on conformity assessments and regulatory recognition could reduce compliance costs in strategic sectors such as medical devices, though implementation remains uncertain.
4. Digital trade and technology
Commitments to refrain from digital services taxes and to support trusted cross-border data flows reduce regulatory fragmentation risks for high-value services and technology-driven exports.
5. Economic security and supply chains
Closer cooperation on export controls, sanctions enforcement and investment screening increases predictability for firms aligned with US strategic priorities, while adding compliance complexity for others.
Together, these pillars point to a deeper—but more conditional—economic relationship, increasingly shaped by geopolitical and security considerations.
Legal and political uncertainty remains high
Critically, the current arrangement is not a binding treaty. Negotiations toward a formal agreement are expected to conclude by the first quarter of 2026, after which the deal would still need to pass Switzerland’s parliamentary process and could be subject to a referendum.
This procedural uncertainty remains a key risk factor. Even if tariffs are reduced in practice within weeks—consistent with the EU–US precedent—the durability of the arrangement cannot be taken for granted.
Temporary stabilization in a structurally uncertain environment
In the short term, the agreement provides much-needed breathing space for Swiss exporters and limits the immediate macroeconomic fallout of US protectionism. However, it does not eliminate trade policy volatility, which is increasingly becoming a structural feature of the global environment.
For Swiss companies, exposure to trade risk will depend less on tariff levels alone and more on their ability to manage uncertainty across markets, supply chains and regulatory frameworks. In this context, the US–Swiss trade agreement reduces downside risks, but uncertainty remains an integral part of the trade outlook.
* Section 232 of the US Trade Expansion Act allows the US administration to impose import tariffs on products deemed critical to national security, independently of traditional trade negotiations.
