US President Trump has imposed punitive tariffs of 39 percent on Switzerland, dealing a serious blow to the Alpine country’s economy. But the Swiss are getting creative.

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Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

Global Tariffs

Swiss exporters, including Thermoplan, a major supplier of coffee machines to Starbucks, are facing significant challenges due to new U.S. punitive tariffs. The 39% tariff on products shipped to the U.S. has led to substantial financial losses for Swiss companies, with some losing hundreds of thousands of Swiss francs weekly. In response, firms are exploring alternatives such as expanding into the Chinese market, relocating production to Germany, or developing new products like automated tea brewers.

The tariffs are affecting not only machinery but also threaten Switzerland's vital chemical and pharmaceutical sectors, which could soon face even higher tariffs. Some companies have already begun laying off staff or implementing short-time work. As a result, more than 30% of Swiss tech firms are considering shifting operations to the EU, where tariff conditions are more favorable. While Switzerland is negotiating with the U.S. to reduce the trade deficit, many companies are preparing for a future with less reliance on the American market.

Why U.S. punitive tariffs put Switzerland under pressure

Thermoplan, based in Switzerland, builds coffee machines exclusively for Starbucks. They're made of more than 1,000 parts, some assembled by hand. The family-run company and the coffee giant have had a successful partnership for nearly 30 years. Now tariffs threaten to unravel it. It was a total shock, like a punch to the gut. It was a real setback and really disappointing. We felt so powerless. Why are Swiss exporters being treated this way? As far as we're concerned, it's not fair. This department produces only for Starbucks, their most important customer. The machines are easy to spot thanks to their copper-colored casing. Thermoplan builds about 40 automatic Starbucks coffee machines every day. But now a 39% tariff applies to every unit shipped to the US. This is our core business and it's really demanding. We want to keep our partnership with our customer. But now we're losing several hundred thousand Swiss francs per week. That's money we could be investing in our company or customers. Instead, it's going to the US government as punitive tariffs. The company now thinks outside the box. Steiner's new hope lies with a Chinese billionaire and tea house chain owner who wants to bring Chinese tea culture to Europe. Thermoplan is transforming a coffee machine into a fully automated tea brewer. Instead of brewing coffee from coffee beans, we can use different types of tea, including green tea and oolong tea. Our machines can brew fresh tea beverages, too. Switzerland's free trade agreement with China could offer a way out of the tariff crisis. For Steiner, another option would be to move production to Germany, a strategy many Swiss tech firms are now considering. More than 30% are planning to shift operations to the EU. Whether it's cheese, watches or machines, Switzerland's economy depends on exports. And the US is its biggest trading partner. The tariffs are already taking a toll, and there's more trouble ahead. Swiss chemical and pharmaceutical exports could soon face tariffs of up to 250 percent. That's Switzerland's most important foreign trade sector by far. Unfortunately, there haven't been any bankruptcies yet, but some companies have started laying off staff. We also know that several companies in our association have not only introduced or are continuing short-time work. They're discussing layoffs. It all depends on how long we're stuck with this 39 percent tariff. To avoid the worst, Swiss companies are increasingly turning to German production sites, like Uber. Upsamed, a medical device maker, their key products are pen injectors that can be filled with insulin, for example, for use by diabetics. We're shipping these pen components to the US today. But now we're trying to move these orders from Switzerland to Schwerin, Germany, to bypass the tariffs. We plan to keep producing new orders for other countries here in Switzerland. Upsamed is now expanding its existing site in Schwerin significantly, creating more than 500 new jobs. Germany and the EU have better tariff conditions with the US, and we want to take advantage of that. Take advantage, yes, but join the EU? Michel says no. Switzerland is confident, maybe sometimes a bit too confident. We have 9 million people, while the US has 400 million. We need to acknowledge that balance of power and present a clear trade package. A new offer is now on the table in Washington, which includes major concessions from Switzerland aimed at reducing the trade deficit. But Swiss companies aren't holding their breath, and many are no longer counting on trade with the US.

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Why U.S. punitive tariffs put Switzerland under pressure

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