Consequences of the pricing shock for Switzerland

On August 1. Similarly, the day of the national holiday, the United States inflicted on Switzerland a customs right of 39%. For example, A surprise decision. However, because the country’s government has been initiated since July in negotiations perceived as being constructive with the Trump administration, without having received a prior notice concerning taxes. Moreover, Higher than the initial levy announced by President Trump on April 2. However, much greater than those imposed on the European Union, these prices should come into force on August 7.

We anticipate a continuation of negotiations until August 7, even beyond. Similarly, We believe that the United States. However, Switzerland will agree on a customs law closer to the 15% imposed on the EU and Japan, with potentially binding concessions. Nevertheless, We also plan to increase Swiss commitments in terms of foreign direct investment. Therefore, a larger import consequences pricing shock switzerland volume from the world’s leading economy.

Economic impact. Similarly, consequences for BNS

Switzerland is one of the European economies most exposed to American customs duties. However. In addition, it should be noted that the basic customs tariffs defined on August 1 exclude the sectors already subject to sectoral taxes or which will be. Nevertheless, They fall under article 232, which authorizes the American president to impose import rights for reasons of national security. Moreover, This element is crucial for the Swiss pharmaceutical industry, which exports some 40% of its products to the United States. Furthermore, The fact that the EU was able to obtain visibility on the level of the prices applicable to pharmaceutical exports within the framework of its trade agreement. regardless of the outcome of section 232, could point out a certain opening of the consequences pricing shock switzerland United States to grant derogations. Swiss gold exports are also affected, although to a lesser extent.

Half of Swiss exports to the United States remain exposed

Half Swiss exports to the United States remain. exposed to a very high basic rate of 39%. These are generally high added goods, such as watches, precision machines and medical devices. Faced with an inelastic demand. American importers could, in many cases and for certain price ranges, pass on most of the customs duties on their customers by increasing the price of Swiss products, without finding a significant drop in demand. A marginal part of exports. such as certain luxury watches, could experience an increase in demand in the event of an increase in prices, due to a rarity or prestige effect.

However, for the vast majority of Swiss exports, this logic has its limits. If Swiss companies can generally support customs duties consequences pricing shock switzerland from 10 to 15% without major erosion of their margins. loss of demand, a tax of 39% places the bar much higher. If this rate is confirmed. it could lead to room reductions or a significant drop in sales in the United States for Swiss exporters, with the exception of certain luxury products.

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We had revised our growth forecast of real gross domestic. product for Switzerland in 2025 to 1.1% (against 0.7% previously) in order to take into account a first semester stronger than expected. However. the announcement by President Trump of 39% prices and the uncertainties that result from it concerning trade between the United States and Switzerland encourages us to adopt a more prudent, 0.9% hypothesis. If the United States applies punitive sectoral taxes on pharmaceutical products, these prospects could drop. The longer these customs duties will remain in consequences pricing shock switzerland force. the higher the risks for the Swiss economy, until it adapts to the shock. We think Berne will intensify his negotiations with the Trump administration.

The announcement by President Trump of 39% prices. the resulting uncertainties encourage us to adopt a more prudent hypothesis for Swiss GDP, at 0.9%

If the country manages to negotiate a customs tariff close to 15%. the Swiss National Bank (SNB) should in our opinion maintain its key rate of zero. However. if the customs tariff of 39% is confirmed, or if the sectoral prices on pharmaceutical products were to be high for the economy, the probability of a return to negative rates would be increased.

Consequences pricing shock switzerland

Implications for Swiss active ingredients

We anticipate a decline in returns from Swiss government obligations. always believe that business and real estate bonds offer attractive sources of income. Swiss actions should decrease during this consequences pricing shock switzerland period of uncertainty. The health sector representing 37% of the Swiss Market Index. the treatment of pharmaceutical exports is crucial for the Swiss Stock Exchange. As mentioned above, pharmaceutical products do not fall under the category of goods taxed at 39%.

In the short term, we anticipate a certain sectoral differentiation

In the short term, we anticipate a certain sectoral differentiation. Construction material suppliers and insurance companies have resisted despite the downward revisions of profits during the recent season of results. Defensive sectors oriented towards the internal market, such as public services, should be better protected. With a course/benefit ratio of 16.6 for the SMI. the valuations of Swiss shares comply with their average over 10 years of around 17, and the market has been delaying compared to other regions since the start of the year. This can alleviate the lowering potential. especially since the Swiss indices have a consequences pricing shock switzerland defensive bias and the country benefits from low interest rates. The evolution of the Swiss franc will also have an impact.

Having been reinforced for several years. the franc seems over -going against the euro: in recent months, the EUR/CHF exchange rate has remained stable and could not descend below 0.92. Even if the customs duties imposed on Switzerland could ultimately be reduced. we are tabling on a first increase in EUR/CHF around 0.95. The USD/CHF could also remain well supported. even if the general dynamics of the dollar should weigh more on the pair of currencies, the latest disappointing data on the American labor market preventing a more significant recovery of the USD/CHF. In the longer term, our hypotheses at twelve months for the USD/CHF and the EUR/CHF stand at 0.79 and 0.93 respectively.