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Swiss pharma industry particularly vulnerable to Trump tariffs

Published on February 10, 2025

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Swiss pharma industry particularly vulnerable to Trump tariffs — Swiss pharmaceutical industry particularly vulnerable to Trump tariffs Keystone-SDA

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Switzerland could also be targeted by the new US President Donald Trump. According to a study by the major bank UBS, the pharmaceutical industry in particular has reason to worry.

This content was published on February 10, 2025 - 14:29

Pharmaceuticals account for 60% of all goods exported from Switzerland to the US. This means that significantly more medicines go to the US than are imported from there to Switzerland. It is well known that such trade surpluses are a thorn in Trump’s side.

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The industry is therefore susceptible to tariffs, according to economists at UBS in a study published on Monday. In their opinion, such tariffs would be a problem. In the longer term, trade barriers could push pharmaceutical companies to move their production and research departments to the US. “Such a relocation would have a significant impact on Switzerland in terms of value creation and tax revenues.”

However, the experts put this into perspective. In their opinion, demand for price-inelastic pharmaceutical products would only react slightly in the short term, even if tariffs were introduced. In addition, some large pharmaceutical companies are already producing locally in the US. The expansion of new sites would not happen overnight, but would take several years.

Growth despite everything

All in all, the UBS experts continue to forecast economic growth of 1.5% (adjusted) for the Swiss in the current year despite the Trump administration’s policies. “However, in the event of a very aggressive trade policy with comprehensive tariffs, both the global and Swiss economies are likely to grow at a significantly slower rate,” they qualify.

How Trump’s orders could affect Switzerland

This content was published on Jan 25, 2025 US President Donald Trump signed dozens of executive orders that disrupt global politics and business as usual. What does this mean for Switzerland?

Massive tariffs on German cars, for example, could have an impact on local suppliers to the automotive industry. The medtech sector could also be affected, according to the data.

The watch industry, on the other hand, has less to worry about. “The effect of higher prices is likely to be minimal for luxury watches, as demand is relatively price inelastic,” say the experts. A relocation is also unlikely.

What do services count for?

In general, there are good reasons for Trump to spare Switzerland, they continue. This is because even though the balance of trade in goods is negative for the US, the situation looks much better if services are included. From this perspective, the trade balance is almost equalised.

Trump’s predecessor Joe Biden also attested to this for Switzerland last November. However, it is “uncertain whether the Trump administration will use the framework established under President Biden to assess the bilateral framework”, according to the economists.

In their opinion, however, the high level of direct investment by Swiss companies and their high number of employees in the US could also be a plus point for Switzerland. It is estimated that Swiss companies employ 300,000 to 400,000 people in the United States.

What is your opinion? Join the debate:

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Adapted from German by DeepL/ac

This news story has been written and carefully fact-checked by an external editorial team. At SWI swissinfo.ch we select the most relevant news for an international audience and use automatic translation tools such as DeepL to translate it into English. Providing you with automatically translated news gives us the time to write more in-depth articles.

If you want to know more about how we work, have a look here, if you want to learn more about how we use technology, click here, and if you have feedback on this news story please write to [email protected].

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