The Swiss government has announced that the United States will reduce tariffs on products from Switzerland from a devastating 39% to 15% under a new framework trade agreement that commits Swiss companies to invest $200 billion in the United States by the end of 2028.
Swiss Economy Minister Guy Palmerin’s announcement Friday will bring U.S. tariffs on Swiss products in line with European Union tariffs. Palmerin told a press conference that the tariff cuts would save about 40% of Switzerland’s total exports.
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The United States, Switzerland and Liechtenstein, which is part of the agreement, aim to conclude negotiations on a trade deal by the first quarter of 2026, the White House said in a statement Friday, when the two countries announced the framework agreement.
Helen Budriger-Altierda, head of Switzerland’s National Economic Secretariat, said the reduced tax rate would likely be implemented within “days and weeks” once the U.S. customs processing system could be adjusted.
He added that the majority of Swiss investment in U.S. production will come from the pharmaceutical and life sciences sectors, but did not provide further details. Pharmaceuticals are Switzerland’s largest export sector to the United States.
U.S. Trade Representative Jamison Greer told CNBC that the deal involves Switzerland moving “a lot of manufacturing to the United States, including pharmaceuticals, gold refining, and railroad equipment. So we’re very excited about this deal and what it means for American manufacturing.”
The deal guarantees Swiss drugmakers, including Roche and Novartis, a 15% tariff cap, which could reach 100% for certain patented medicines, due to US President Donald Trump’s Section 232 national security obligations on the sector.
Parmelin said the 15% cap would also apply to future Section 232 tariffs involving semiconductors, putting them in the same position as the EU.
“The risk of much higher sectoral tariffs is therefore eliminated,” Parmelin added.
The Swiss government said in a statement that the agreement would reduce Swiss import duties on U.S. industrial products, seafood and agricultural products that “Switzerland considers to be insensitive.”
The Swiss government has announced that it will grant the United States bilateral tariff exemptions for 500 tons of beef, 1,000 tons of bison meat, and 1,500 tons of poultry meat.
Level playing field with the EU
Swiss industry groups welcomed the deal, saying it would put it on a level playing field with European Union competitors who have agreed to impose a 15% tariff on EU exports to the United States.
“This is good news for the industrial sector, which has been subject to 39% tariffs since August 1. For the first time, we are in the same situation as our European competitors in the US market,” said Nicola Tettamanti, president of Swiss Mechanic, which represents small and medium-sized manufacturers.
Hans Gersbach, director of the KOF Swiss Economic Research Institute at ETH Zurich, said: “Although the tariffs are significantly reduced, there remains an additional economic burden and risk for Switzerland.”
Gersbach said Swiss machinery, precision instruments, watchmaking and food sectors, which export to the United States, would receive the most relief.
KOF forecasts Switzerland’s economic growth rate of 0.9% in 2026, which could rise to more than 1% if tariffs are lowered, he added.
Nadia Gharbi, an economist at Swiss bank Pictet, said the tariff cuts removed a major downside risk to the country’s economy, a clear positive development for Swiss industry and overall growth prospects.
“Under the previous tariff regime, Switzerland suffered a significant reduction in competitiveness, not only because of the strength of the Swiss franc, but also because neighboring European economies were subject to tariffs of only around 15%,” he said.
Swiss industry on Friday reported a 14% drop in exports to the United States in the three months to September, and machine tool makers said shipments fell 43%, according to Swissmem, a technology industry group.
