With 39%American taxes, it is a question of facing a shock equivalent to that experienced by the last 20 years.
A priori, the 39% customs barrier seems hard to cross for Switzerland and the announcement made by Trump at 1is August 2025 will not fail to include it in the dark annals of Switzerland, like December 6, 1992 when the late Federal Councilor Jean-Pascal Delamuraz decreed that Switzerland’s vote against European Economic Space was making it a “black Sunday”.
The parallel between these 2 shocks did not fail to be noted by certain political parties in Switzerland which ensure that the addition would have been much less salty for Switzerland if it had been part of the European Union. If this had been the case, Switzerland would undoubtedly have obtained the same customs tax as the European Union, 15%… But at what price?
To obtain this tax of “only” 15%, the EU is committed to buying for $ 750 billion in American energy over 3 years, or 250 billion per year. In 2024, the total energy import bill for the European Union vis-à-vis around the world amounted to $ 435 billion. Imports from the United States represent 46% of this sum, or about $ 200 billion. Over 3 years, the European Union will therefore have to pay 150 billion more in the United States that it does not do so. If we add to this sum the additional promise made by the EU to buy armaments in the United States for an amount estimated at 250 billion over the next 3 years, we arrive at an additional 400 billion slate that the EU will have to pay in the United States. By way of comparison, the United States trade deficit vis-à-vis the EU amounts to just over 200 billion dollars per year: I say that, I say nothing …
But back to our little Swiss. Do you know that she has already experienced a 39% customs tax for these exports to the United States …? You doubt it and … you are right to do it. But let’s see what could be the foundation of this assertion.
The dollar was worth 1.31 francs ago. Today, the greenback has lost 39% of its value compared to its price in August 2005. In that it increases the price of Swiss exports of 39%, is it an appreciation of the franc of this same percentage is not equivalent to a customs barrier?
So yes, of course, an assessment of the franc of 39% over 20 years, it is not the same as an equivalent increase in the price of exports from Switzerland in 1 day, from August 6 to 7, 2025, the date on which the customs surcharge came into force. But … the main thing is elsewhere.
In this case, the competitiveness of the “made in switzerland” is not measured by variations in the nominal exchange rate between Switzerland and the United States but to its evolution on a real basis.
To move from the nominal exchange rate during the real course of the dollar against the franc, it is necessary to take into account the difference in inflation between Switzerland and the United States. To reverse the 2 countries is even better, since inflation in Switzerland is much lower than that of the United States.
The explanation is simple. When the franc is appreciated by 39% compared to the dollar, it is an evil for Swiss exports. If on the other hand, the price of Swiss exports increases less quickly than its equivalent in the United States, exports of the “Swiss made” keep their competitiveness. In other words, if the gap between the price of exports to the United States and their equivalent in Switzerland reaches 39% during the period when the franc is appreciated by this same percentage, Swiss exports lose nothing of their competitiveness: well … This is exactly what has happened over the last 20 years, as evidenced by the graph below.
For 20 years, the nominal assessment of the franc vis-à-vis the dollar was 39%, but … it has remained stable in real terms
The Bordeaux curve shows the evolution of the nominal exchange rate of the franc, on the left scale. The assessment of the Swiss motto has therefore been 39% over the last 20 years. Indicated by the orange curve, the real exchange rate of the franc has remained stable over the same period, from 1.38 to 1.34. This means that the assessment of the franc has only erased a much faster increase in the price of exports to the United States compared to Switzerland.
The analysis can also be done with Switzerland’s trading partner, namely the euro zone. Over the past 20 years, the franc has appreciated 60% vis-à-vis the euro, which has not prevented a strong increase in Swiss exports to the EU, and therefore, industrial production in Switzerland.
Our second graphic could not be more clear on the subject and does not happen from any comments …
Despite a 39%”tax”, industrial production in Switzerland has done 10 times better than the United States over the past 20 years!
Exports remain an essential engine of growth in Switzerland. High added value and specialization have enabled Switzerland to maintain its competitiveness in the past 20 years, despite the strong franc. It is a question of dealing today with a shock equivalent to that experienced by the franc over the last 20 years. It will not be easy, but we bet that Switzerland’s exports will be able to remain competitive, especially, if, each year, their price continues to increase much less quickly than with our business partners.