This developed country hit with highest tariffs by Trump administration

Luxury watches, coffee capsules, and high-value exports from this EU nation were hit with a steep 39% US tariff on Thursday. A last-ditch effort by the country's president to stop the move also failed

One of the steepest tariffs imposed under US President Donald Trump came into effect on Thursday, targeting Swiss exports with a 39 per cent surcharge. The punitive duty, the highest among developed nations, applies to goods ranging from luxury watches to Nespresso coffee capsules.

 

Tariff kicks in despite Swiss outreach 

Switzerland made a last-minute diplomatic effort to stop the tariff, but it didn’t succeed. The tariff came into force on all products loaded for transport to the US after 12.01 am (local time, 6.01 am Zurich time), reported Bloomberg. Pharmaceuticals and gold are currently exempt, though this could change soon.

 

 

Swiss President Karin Keller-Sutter travelled to Washington on a hastily arranged two-day visit earlier this week. However, she was unable to meet Donald Trump or top trade officials and left the US empty-handed. Keller-Sutter could only meet US Secretary of State Marco Rubio and described the meeting as “very good”, but no breakthrough was reached, reported Reuters, citing sources. 

 

US frustration over trade imbalance 

The tariff announcement stunned Swiss officials, especially as negotiations had seemed promising. The situation deteriorated when Trump scrapped a draft framework agreement in a call with Keller-Sutter last week.

 

At the heart of Trump’s decision is Switzerland’s large trade surplus with the US, which stood at around $38.5 billion in 2024. Trump, who has long decried bilateral imbalances, reportedly took personal issue with the deficit.

 

Top Swiss exports to the US include:

 

• Gold
• Pharmaceuticals
• Watches
• Medical devices

Domestic costs limit Swiss options 

Keller-Sutter, who also serves as Switzerland’s finance minister, is in a tough spot politically. Any concessions that might satisfy Washington are likely to be domestically unpopular, yet would do little to meaningfully reduce the trade gap in the short term.

 

The structural nature of the imbalance, driven by Switzerland’s dominance in high-value exports like pharmaceuticals and watches, means a quick correction is unlikely.

 

Trump Tariff threatens Swiss economy 

While the initial surcharge excludes pharmaceuticals and gold, Trump signalled on Tuesday (local time) that tariffs on pharmaceutical imports could follow “within the next week or so.” He said levies might eventually rise to 250 per cent, reported Bloomberg.

 

If such duties were applied across the board, they could endanger up to 1 per cent of Switzerland’s economic output in the medium term, according to Bloomberg Economics. Switzerland is home to pharmaceutical giants Novartis AG and Roche Holding AG, making the sector particularly vulnerable to further US trade action.