Key Takeaways
- President Donald Trump unveiled plans to impose a 39% tariff on Swiss imports—the fourth highest import tax in his most-recent list of “reciprocal” tariffs.
- The import tax could lead to higher prices on Nespresso products and watches, executives said.
- Some $18.9 billion in pharmaceutical products were imported from Switzerland last year, and could also be subject to a sector-specific tariff.
Swiss goods may soon be subject to steep tariffs that could drive up the price for Nespresso products, pharmaceuticals and watches in the U.S.
President Donald Trump announced plans to impose a 39% tariff on goods from Switzerland beginning August 7th. Thats the fourth-highest rate unveiled by the White House in its latest list of reciprocal tariffs, which are an attempt to rebalance trade with nations that buy less than they sell to the U.S.
Switzerland’s General Counsel in a series of messages on the social network X said the tariffs come “despite the progress made in bilateral talks and Switzerland’s very constructive stance from the outset” and that it “continues to seek a negotiated solution” with the U.S.
Switzerland had a $38.5 billion trade deficit with the U.S. in 2024, according to the Office of the U.S. Trade Representative. The U.S. imported $63.4 billion worth of goods from Switzerland last year, including $18.9 billion in pharmaceutical products, nearly $15 billion in precious metals, pearls and stones, $6.4 billion in clocks and watches, and $4.6 billion in organic chemicals, according to data downloaded from the U.S. Department of Commerce.
Companies paying import taxes may price the expense into their U.S. rates. One retailer, the U.K.-based Watches of Switzerland Group PLC, has already seen its U.S. partners raise prices by a mid-single digit percent, CFO Anders Romberg said on a quarterly earnings call in July. At that point, the tariff rate was 10%.
“Our view is that some brands are looking to share the tariff pain with retailers rather than passing the full cost on to the consumers,” Romberg said, according to a transcript made available by AlphaSense.
Nespresso machines and coffee are among the few products the Swiss-based Nestlé imports into the U.S., company leaders said on a conference call in April. Price increases were among the “mitigating actions” under consideration, CFO Anna Manz said, according to a transcript. But Nestlé cited rising commodity prices when talking about its coffee-price increases on a conference call in July.
The outlook for pharmaceuticals is harder to gauge, with Trump floating a 200% tariff on the sector. Some products that are critical for U.S. national security may get exemptions, said Thomas Schinecker, CEO of Switzerland-based Roche Holdings. The company was moving inventory into the U.S. and ramping up production of medicines made here, Schinecker told investors in July.
“We’ve had a number of discussions with the U.S. government, and there is clearly this idea that was mentioned before that there is a transition time for pharma companies,” Schinecker said, according to a transcript.
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