Swiss Economy Accelerates as Companies Rush to Outpace U.S. Tariffs

ZURICH: The Swiss economy expanded by 0.8 per cent in the initial quarter of 2025, the government announced on Monday, marking its quickest quarterly growth rate in two years as firms accelerated exports to sidestep impending U.S. tariffs. Deliveries of pharmaceuticals, chemicals, timepieces, and precision tools soared as Swiss firms increased exports to the U.S. ahead of tariffs set by President Donald Trump's administration. "Exports to the U.S. increased significantly, indicating potential front-loading linked to U.S. trade policy," stated the State Secretariat for Economic Affairs. 

Consequently, the Swiss gross domestic product grew by 0.8 per cent relative to the same quarter last year and doubled its long-term average growth rate per quarter. The rise was the largest since the beginning of 2023. Swiss producers were shocked when the U.S., Switzerland's primary trading partner, revealed 31 per cent tariffs on the European nation in April. The figure has now been reduced to 10 per cent on a temporary basis, as Swiss politicians are keen to establish a permanent agreement in the upcoming weeks. Swiss engineering firms of small and medium size have voiced worries about the unpredictability. 

ALSO READ: Tariff Worries Pressure Global Shares and U.S. Dollar

Swissmechanic reported that foreign clients were more hesitant to invest in new equipment, while the significant rise in the value of the Swiss franc added further pressure. Swissmechanic President Nicola Tettamanti noted that numerous orders for machinery and equipment have been postponed or cancelled as companies stalled their investment choices. "Everyone is in a wait-and-see approach, which results in no orders," Tettamanti stated. The Swiss Purchasing Managers' Index decreased by 3.7 points to 42.1 in May, data released on Monday indicated, marking its lowest point since May 2023 and significantly under the growth benchmark of 50 points.