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Press release
18 Dec 2025
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Zurich, Switzerland
US tariffs weigh on Swiss economy – EY expects growth to slow significantly in 2026
- Following a strong start to 2025, the Swiss economy is losing considerable momentum.
- Even under the new trade agreement, GDP growth is expected to be 0.9% lower in 2026 than in a scenario without additional tariffs.
- However, the negative effects of the tariffs on the Swiss economy are only temporary in nature, while a negative long-term impact of around 0.4% is expected for the United States.
Zurich, 18 December 2025 - The new Global Economic Outlook from the auditing and consulting firm EY shows that the Swiss economy lost significant momentum over the course of 2025. Following a strong first quarter with year-on-year growth of 2.3% which was mainly driven by exports brought forward to the United States, momentum slowed to 1.5% in the second quarter and then further to 0.6% in the third. The significant downturn can be attributed to the phasing out of front loading, unfavorable base effects resulting from the major sporting events of the previous year and the increased US tariffs.
Tariff burden remains heavy, even after new trade deal
The United States imposed a nominal tariff of 39% on selected Swiss exports. Owing to sector-specific exemptions, however, the effective tariff rate on exports to the United States was around 13%. In accordance with the memorandum of understanding between Switzerland and the United States of November 14, 2025, a 15% tariff ceiling on most export categories came into force with immediate effect. However, as only around 30% of Swiss exports were affected by the nominal 39% tariff, the direct beneficial effect is limited. Nevertheless, this easing of the burden on exports to the United States is existential for the industries concerned.
However, there is still considerable uncertainty regarding sectoral US tariffs. In particular, the possible introduction of tariffs on pharmaceuticals from the first quarter of 2026 represents a key risk, as these account for around half of Swiss exports to the United States.
Overall, the new trade agreement only partially reduces the economic burden of tariffs. Despite the agreement, EY expects GDP growth to be around 0.9 percentage points lower in 2026 than in a scenario without additional tariffs. Without a trade agreement, the projected impact would have been approximately a quarter higher at 1.2 percentage points.
As a result, EY expects GDP growth to be subdued in 2026 at around 0.6% compared with expected growth of 1.2% in 2025. The economy is expected to pick up again from 2027: growth is forecast to be approximately 1.5%, supported by a recovery in the eurozone, a stabilization in global demand and more favorable financing conditions.
“The current forecasts show a marked change in the economic picture. The fluctuations over the course of the year illustrate how quickly outside forces are reflected in Swiss GDP,” said Daniel Gentsch, Chairman of EY Switzerland. “For 2026, we expect a phase in which the tariff effects will become clearly visible before the trend can gradually stabilize.”
Weak labor market and low inflation
The Swiss labor market is already showing signs of a slowdown. Employment growth was 0.6% to 0.7% in the first half of 2025, while registered unemployment has risen slightly since the end of 2023. Business surveys point to a further deterioration in employment dynamics. Wage growth also remains moderate. Wages are currently rising below 1%. An increase to around 1.4% is expected for 2026 as soon as the economic situation stabilizes.
Consumer price inflation is currently 0%, the lower end of the target range of the Swiss National Bank (SNB). Falling energy prices, a strong Swiss franc and weak demand are all significant factors in keeping prices from rising.
The SNB cut the key interest rate to 0% in June 2025 and has left it unchanged since then. If the Swiss franc appreciates further or the rate of inflation falls again, EY does not rule out negative interest rates, even in the short term. An interest rate hike is not expected until 2027 or 2028 once inflation rises above 1% again and the economic recovery takes effect.
Outlook: Strain on economy heaviest in 2026 – recovery expected thereafter
EY expects the economic burden resulting from the US tariffs to be at its heaviest in 2026. In particular, any additional sectoral tariffs on pharmaceuticals are likely to further dampen growth. A gradual recovery is expected from 2027, supported by a more solid eurozone economy, more stable global demand and a more favorable interest rate environment. Despite the current uncertainty, the structural framework of the Swiss economy remains solid. What happens going forward will be determined not by the nominal tariff rates, but by the effective tariff burden.
Swiss & global economic outlook
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