Switzerland secures US tariff reduction to 15% and pledges $200 billion in investments
The United States and Switzerland On Friday, reached a historic framework trade agreement, which includes a significant reduction in US tariffs on Swiss imports, from 39% to 15%. In return, Swiss companies committed to investing $200 billion in the United States by 2028.
- Switzerland has secured a deal to lower US tariffs on its exports to 15%, aligning its rate with the European Union and protecting key sectors like pharmaceuticals.
- As part of the agreement, Switzerland has pledged $200 billion in investments into the US, which includes significant prior investments from companies like Roche and Novartis.
- The Swiss investments will target US production in pharmaceuticals, medical devices, aerospace, and gold manufacturing, with the goal of creating American jobs.
- The deal is reciprocal, with Switzerland also reducing its tariffs on certain US goods and recognizing US motor vehicle safety standards.
The agreement, which also includes Liechtenstein, aims to finalise trade negotiations by the first quarter of 2026, according to a statement from the White House.
US Trade Representative Jamieson Greer hailed the deal, emphasising that it dismantles long-standing trade barriers and opens new markets for American goods. He also welcomed the substantial Swiss investment, noting that it would help address the US deficit in pharmaceuticals and other key sectors, generating thousands of jobs nationwide.
The pledged $200 billion in investments will be made over the coming years, with $67 billion expected in 2026 alone. The total includes prior US investments, such as $50 billion from pharmaceutical giant Roche and $23 billion from Novartis, along with contributions from companies like ABB and Stadler.
In addition to pharmaceuticals, which represent Switzerland's largest export to the US, the investments will focus on US production in medical devices, aerospace, and gold manufacturing.
Swiss Economy Minister Guy Parmelin stated that the agreement would bring Switzerland's tariff rate in line with the European Union's 15%, benefiting about 40% of Switzerland’s exports to the U.S. While acknowledging that Switzerland would have preferred these investments to be made domestically, Parmelin emphasised that the government is actively working to reduce costs for Swiss businesses.
The agreement also includes a cap of 15% on tariffs for Swiss pharmaceutical producers, protecting them from future US Section 232 national security duties, which could rise to 100% on certain drugs. This cap will also apply to other sectors, including semiconductors, aligning Swiss companies with their European competitors.
Additionally, Switzerland will reduce tariffs on US industrial products, fish, seafood, and non-sensitive agricultural goods. In return, Switzerland will provide the US with duty-free access to a specified quantity of beef, bison, and poultry. The deal also includes mutual recognition of US motor vehicle safety standards, addressing previous concerns regarding European reluctance to buy American-made cars.
Swiss industrial groups have welcomed the agreement, highlighting its fairness and the benefits it brings to their sectors, such as machinery, precision instruments, watchmaking, and food. The reduced tariffs are expected to boost Swiss economic growth, which is forecast to rise from 0.9% to over 1% in 2026.
In 2024, Switzerland reported a $38.3 billion goods trade surplus with the U.S., which increased to $55.7 billion by July 2025. The tariff reduction is expected to further improve Switzerland’s competitiveness, which had been hindered by higher tariffs compared to neighbouring European countries.
Swiss industries, especially those in technology and machinery, have reported a decline in exports to the US due to previous tariffs, but the new deal is seen as a clear boost to the country's economic outlook.
Reuters
