01.08.25 - New tariffs - 39% for Switzerland

As the August 1 deadline passes, the U.S. has finalized its latest round of global tariffs. Trump’s executive order imposes duties ranging from 10% to 41% on dozens of countries, along with an additional 40% penalty on goods flagged as transhipped.

Switzerland was slapped with a 39% levy on imports, higher than the 31% rate initially announced. The US had a USD 38 billion trade deficit with Switzerland last year and the economy rests on large contributions from industry giants Novartis and Roche.

India, meanwhile, has been singled out for a 25% tariff rate on its exports. But that's not all. Trump announced that India would also face an unspecified “penalty” for its continued military and energy dealings with Russia.

Markets: Swiss Market is closed today (Swiss National Day) - Equity indices down across the globe - Swiss franc weakens - cryptos down

My View: This time, there was not deadline extension. The TACO trade was still on, why some investors got now caught on the wrong foot.

Despite prior warnings, it seems Swiss authorities didn’t push hard enough to secure a deal, unlike peers such as the UK, Japan, the EU and Vietnam who negotiated lower rates or exemptions earlier this year.
With pharma, luxury goods, and precision machinery among Switzerland’s key exports to the US, the potential impact for several companies could be more severe than previously anticipated.

With the second tariff round imposed to India, it seems that geopolitical alignment is now firmly entangled in trade policy.

As mentioned in my previous updates, the latest headlines could act as a catalyst for increased market volatility in the days ahead.

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