Switzerland’s powerful manufacturing lobby has sounded the alarm after President Donald Trump raised a temporary U.S. import tariff to 15%, arguing the move intensifies global trade instability and suppresses investment across export-driven economies. The warning comes as Switzerland seeks to formalize a bilateral tariff arrangement with Washington, highlighting how legal and policy volatility in the U.S. is rippling through Europe’s industrial core.

From 39% Shock to 15% Reset

Switzerland was among the hardest-hit European economies when Washington imposed a 39% import duty on Swiss exports in August. That rate was later reduced to 15% under a provisional agreement reached in November, aligning Swiss treatment with the European Union. Bern has since been negotiating to formalize that accord, with Washington reportedly aiming to conclude talks by the end of March.

However, the Supreme Court’s decision to strike down Trump’s earlier emergency tariff framework has injected fresh uncertainty. In response, the administration introduced a temporary 10% global tariff before quickly lifting it to 15%. According to Swissmem, Switzerland’s leading industry association, this escalation “exacerbates the current chaos,” undermining business planning at a time when supply chains remain fragile.

While Swissmem indicated that the newly announced tariff may not be stacked on top of the previously negotiated 15% rate, when combined with a pre-existing 5% duty on industrial goods, the effective burden could approach 20% for Swiss exporters. For an economy heavily reliant on high-value manufacturing and precision engineering, that margin compression is significant.

Investment Chill Across Industrial Europe

Switzerland eliminated its own industrial tariffs in 2024, aiming to strengthen competitiveness and attract capital. The renewed U.S. tariff volatility complicates that strategy. Swissmem argues that the unpredictability surrounding U.S. trade policy is discouraging investment decisions, particularly in sectors such as mechanical and electrical engineering.

Higher tariffs inevitably translate into increased costs for American buyers of Swiss machinery, automation systems, and specialized equipment. In price-sensitive procurement cycles, even marginal increases can shift purchasing decisions. The only relative cushion, Swissmem notes, is that competing foreign suppliers are likely facing similar tariff burdens, limiting competitive disadvantage but not eliminating demand risk.

For multinational firms operating transatlantic supply chains, the issue extends beyond tariff percentages. The broader concern is legal durability. If U.S. trade policy continues to pivot between executive action and judicial review, companies may delay expansion plans or redirect capital toward more predictable jurisdictions.

Strategic Implications Beyond Switzerland

The episode underscores a deeper structural tension between trade enforcement and economic certainty. Switzerland’s case illustrates how mid-sized, export-oriented economies are particularly exposed to abrupt shifts in U.S. policy. While negotiations may stabilize bilateral arrangements, the precedent of rapid tariff escalation could weigh on corporate confidence across Europe.

Looking ahead, investors and policymakers will monitor whether Washington and Bern can finalize a legally robust agreement before the March deadline. A durable framework could restore some stability to Swiss industrial exporters. Conversely, prolonged legal ambiguity risks entrenching cautious capital allocation and slower cross-border trade flows.

In a global environment already shaped by geopolitical tensions and shifting supply chains, tariff unpredictability may prove more damaging than the rate itself. For Switzerland’s manufacturing sector — and for global trade at large — clarity, not merely compromise, is becoming the critical variable.