Swiss Firms Rethink Global Strategy After Tariff Surge

Mint

17 hours ago

Simon Michel couldn't take the risk of waiting any longer.
As Switzerland was assessing the shock announcement that the US would impose a 39% tariff, the chief executive officer of Ypsomed Holding AG realized that he needed to act.
Ypsomed plans to move some production of medical devices to the German city of Schwerin, where the tariff is less than half the Swiss level. The executive also wants to ramp up production in the US, he told Bloomberg News.
The Burgdorf-based company isn't alone. Across the country, executives and owners at businesses — from large multinationals such as food giant Nestle SA to small domestic champions — are trying to figure out how to deal with the new reality. The scale of the levy exceeded all expectations and caught the Swiss business elite off guard.
In a call with executives on Monday, one of Switzerland's chief negotiators said that they were still working on getting the overall tariff rate down. Their response to her was blunt: there's no substitute for the US market.
Plans to move, such as Michel's, could still change if Switzerland gets Donald Trump to lower the tariff. But with so much at stake, some businesses are taking matters into their own hands.
Machine-tool maker Netstal Maschinen AG is looking to reduce the share of Swiss components in its supply chain for products aimed at the US market, which accounts for approximately 15% of revenue. Orders from the US have already fallen 20% in the first half of 2025, CEO Renzo Davatz said. And it's likely to get worse if the Swiss don't get a better deal.
A one-hour drive away in Weggis, Adrian Steiner, the CEO of Thermoplan AG, which builds coffee machines for Starbucks among other things, is sketching out plans to expand production capacities in the EU and the US, he said. However, he wants to wait for a final decision until the US tariffs kick in.
One high-profile consumer product caught up in the Swiss tariffs is Nespresso. Though Nestle SA sells the coffee capsules all over the world, it only produces them in Switzerland.
Most of its other product lines are made locally for their respective markets. The same holds true for many of Switzerland's international listed companies, including consumer brands such as Lindt & Spruengli AG and Logitech International AG, as well as industrial players like ABB Ltd and Holcim AG.
After Trump's so-called Liberation Day announcements on tariffs, some firms without fully diversified production front-loaded shippings to the US.
Shipping company Kuehne and Nagel International AG saw a slight increase in industry-wide shipments from Switzerland to US in the period. Switzerland is only a small part of their business.
But for companies that waited, believing the government's optimistic messaging about a US deal, there was a shock last week. Now, there's no time.
'There is some movement to expedite loadings, but generally the timeline is too tight to load unplanned shipments into containers and to then gate in and get on a ship,' a spokesperson for Kuehne and Nagel said. 'Many hinterland manufacturers simply did not have time.'
The risks to the Swiss economy are sizable. A 39% tariff rate might knock off 1% of Switzerland's gross domestic product over the medium term. While large multinational companies have some chance of reorienting supply chains and production to cope, it's much harder for smaller family-owned businesses.
There's also the personal cost. Lobby group Swissmem says the tariffs put tens of thousands of Swiss jobs at risk.
Among Switzerland's top companies, Roche Holding AG and Novartis AG are in the clear for now as pharmaceuticals are exempt. But that might soon change, with Trump warning he could announce tariffs on the sector in the next week.
Some companies have tried to get ahead of the tariffs by frontloading early in the year.
'We transferred a lot of stock already in the first six months of this year when the story about the tariffs started,' watchmaker Swatch said in a statement. 'In such a situation, inventory is key and a competitive advantage.'
With assistance from Naomi Kresge, Jennifer Creery, Noele Illien and Sonja Wind.