Switzerland is moving to shield its companies from mounting global pressures after a steep 39 percent U.S. tariff took effect. At a closed meeting on Wednesday, the Federal Council acknowledged that shifts in the international environment are weighing on the country’s competitiveness and pledged to accelerate its economic policy agenda.
The government plans to ease regulatory burdens on businesses, review costly pending projects, and deepen dialogue with the private sector as part of efforts to preserve Switzerland’s position as an attractive business hub.
Switzerland hit with some of the steepest U.S. tariffs
“The international environment has been highly volatile for some time. The U.S. is seeking to restructure trade relations and is distancing itself from the OECD minimum tax reform. The EU is increasingly focusing on strengthening competitiveness and reducing administrative burdens for companies. These changes have both negative and positive effects on Switzerland as a business location,” said the government on Wednesday.
With its openness, stable framework conditions, comparatively lean regulations, reliable infrastructure and an outstanding education and research landscape, Switzerland continues to offer a very good environment for investment and innovation. Against the backdrop of increasing global uncertainty, Switzerland’s legal, economic and political stability is becoming increasingly important.
President Donald Trump imposed U.S. import tariffs of 39 percent on Swiss goods, though pharmaceuticals and some other sectors have so far been spared the duties. Â Compared with other US trading partners with similar economic structures, the tariffs imposed on Switzerland are among the steepest.
Currently, around 10 percent of Switzerland’s exports of goods are affected by additional U.S. tariffs.
Government seeks alternative international sales markets
To protect its businesses from the impact of tariffs, Switzerland said that improving the general business conditions for all companies is the most effective way to maintain the competitiveness of the Swiss economy.
The government instructed departments to submit proposals to reduce the administrative burden on businesses. The Federal Council is now intensifying its efforts to implement the economic policy agenda of May 22, 2024.Â
“Priority is given to efforts to reduce companies’ production costs. It is also important to further strengthen access to alternative international sales markets for geographical diversification and to ensure legal and planning security for companies,” the statement added.
It also noted that important milestones have already been achieved – including the free trade agreement with India, which will soon enter into force, and the recent conclusion of negotiations for a free trade agreement with Mercosur.
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Targeted relief for companies
Switzerland is also placing particular attention on easing the regulatory burden on companies. The necessary instruments were created last year with the Corporate Relief Act; “these must now be consistently implemented,” it said. Additional burdens from new regulatory proposals are to be avoided. Additional relief from existing regulations will also be identified.Â
The government is also reviewing rapidly implementable measures in the area of short-time work compensation. The Federal Council will comment in early September on a parliamentary initiative that would extend the maximum period for receiving short-time work compensation from the current maximum of 18 months to 24 months within a 24-month framework period.
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