US economic growth may decelerate in response to imposed tariffs from the United States
Switzerland's economic outlook has taken a turn for the worse, following the introduction of higher tariffs on imports from the country by the United States.
In a recent update, the Swiss economy ministry's State Secretariat for Economic Affairs (SECO) predicted a growth of only 1.2 percent this year and 0.8 percent next year. This is a significant drop from the 1.3 percent growth forecasted by the Swiss government's expert group on business cycles in their June forecast.
The worsening outlook is largely attributed to the 39-percent tariff rate imposed by the US on incoming Swiss goods, effective August 1. This tariff rate is higher than the 10 percent "baseline" levy that was launched by US President Trump in April.
SECO stated that the anticipated correction in growth has now occurred, following the above-average growth seen in the previous quarter. The higher tariff rate poses a threat to various sectors of the Swiss economy, including watchmaking, industrial machinery, chocolate, and cheese.
Swiss businesses are concerned that competitors in other wealthy economies, such as the European Union and Japan, have negotiated lower tariff rates (15 percent and 10 percent respectively).
Despite the economic challenges, a severe recession is not currently expected. However, the economic impact could be significant for certain sectors and companies.
Notably, Switzerland hosted the UEFA Women's Euro 2025 football championships in July, with total attendances exceeding 600,000 across the 31 matches. In the second quarter of 2025, Switzerland's gross domestic product, adjusted for sporting events, increased by 0.1 percent, following growth of 0.7 percent in the first quarter.
The German government, along with research institutions like the German Institute for Economic Research (DIW Berlin) and the Institute for Macroeconomics and Economic Research (IMK), update comprehensive economic forecasts around October 2025. These entities provide the full economic outlook for Germany during this period. The next full economic forecast update for Switzerland is scheduled for October 16.
Bern, the Swiss capital, argues that the United States enjoys a significant services trade surplus and that most US industrial goods enter Switzerland tariff-free. This argument suggests that the tariffs could have a disproportionate impact on Swiss exports, further exacerbating the economic challenges facing the country.
