Since 7 August, reciprocal tariffs of 39% plus special tariffs of 50% on steel and aluminium, combined with a weak US dollar, have made Swiss exports around 50% more expensive than they were at the turn of the year. Exports by the Swiss tech industry to the US market plummeted by 14.2% within a matter of weeks. The newly negotiated 15% tariff may seem almost moderate, but in reality it merely removes the severe disadvantage Swiss producers faced relative to those from the EU or Japan.
Persistent negative factors
However, the pressure on companies in the Swiss tech industry (comprising the mechanical, electrical and metal industries as well as related technological sectors) remains enormous after nine quarters of declining revenues. Talk of an all-clear would be premature:
Firstly, the past few months have shown that the situation can change abruptly at any time – an environment of stability and predictability is not in sight. Secondly, the strong Swiss franc and weak currencies of European and Japanese competitors mean that Swiss products still face a damaging price premium. Thirdly, tariffs of 50% remain in place on many Swiss products, and further US reviews are underway that could lead to additional tariffs. And fourthly, global trade uncertainties remain enormous and the willingness to invest is correspondingly low – China finds itself in deep crisis, while European markets only seem to be recovering slowly.
Swissmem President Martin Hirzel says: “The tariff reduction offers a brief sigh of relief for the tech industry – but it is by no means an all-clear. New tariffs could be introduced. The strong Swiss franc remains. And market uncertainty is huge. It would be foolish to sit back and relax: politicians must now reduce existing burdens and open up new markets.
Politicians must act now
The Federal Council and Parliament have the power to decisively support companies in the tech industry and their approximately 325,000 employees during this challenging period by improving the framework conditions for Switzerland as a tech industry hub. On the one hand, this means reducing and eliminating regulations and avoiding new costs. On the other, sales markets must be secured and new ones opened up: through the revision of the Federal Act on War Material in the winter session and the swift conclusion of new free trade agreements.
Swissmem has launched a petition outlining the tech industry’s demands:
US tariffs: come together to strengthen the Swiss export industry now – Swissmem
For further information please contact:
Noé Blancpain, Member of Management and Head of Communications & Public Affairs
Tel. +41 44 384 48 65 / mobile +41 78 748 61 63
E-mail n.blancpainnoSpam@swissmem.ch
Philippe Cordonier, Member of Management and Head of Swissmem Romandie
Tel. +41 44 384 42 30 / mobile +41 79 644 46 77
E-mail p.cordoniernoSpam@swissmem.ch