US Tariffs 2025: Differential Treatment of Switzerland and Liechtenstein – A Preliminary Assessment
The newly imposed US tariffs on European imports pose significant challenges for Swiss businesses: Swiss goods are subject to a 39 percent rate, whereas Liechtenstein faces only 15 percent. This analysis explores the political context behind the disparity, assesses the economic impact on the Swiss–Liechtenstein customs union, and outlines strategic options for affected companies.
As of 1 August 2025, new US tariffs on imports from Europe have taken effect. Switzerland and Liechtenstein are particularly affected. While Swiss goods face a tariff rate of 39 percent, the US government applies only 15 percent on goods from Liechtenstein.
This measure is part of President Trump’s “Reciprocal Tariffs” strategy and is based on the principle of reciprocity. The unequal treatment raises fundamental questions regarding economic diplomacy, the customs union between Switzerland and Liechtenstein, and the strategic options available to affected companies. The authors analyse the current situation based on publicly available sources.
The New Executive Order and Its Objectives
The Executive Order of 30 July 2025 aims to reduce trade imbalances while safeguarding national security interests. More than 40 countries are affected, with tariff rates ranging from 10 to 41 percent.
Switzerland was initially assigned a tariff rate of 31 percent, which was later raised to 39 percent as negotiations in Washington stalled. US criticism focuses on insufficient reduction of trade barriers, lack of substantial concessions on security issues, and inadequate alignment compared to the EU.
In contrast, Liechtenstein’s rate was reduced from 37 percent to 15 percent – a move that surprised many observers. One reason may be Liechtenstein’s membership in the European Economic Area (EEA), unlike Switzerland. Another factor could be the existing cooperation between Liechtenstein and the US under the Strategic and Economic Partnership Dialogue (SEPD).
Liechtenstein: Effective Positioning Through SEPD
From the outset, Liechtenstein pursued a joint solution together with Switzerland. The government actively participated in trilateral talks with the US and Switzerland and deliberately refrained from separate negotiations. This strategy ensured a coordinated approach rather than unilateral action.
Despite this close alignment, Liechtenstein’s cooperation with the US under SEPD likely contributed to Washington’s perception of Liechtenstein as a particularly cooperative partner – with tangible economic benefits.
SEPD was launched in August 2024 between Liechtenstein and the US and first convened in Washington in October 2024. It is based on a Memorandum of Understanding aimed at deepening bilateral cooperation in trade, investment, technology and shared values. The next meeting is scheduled for 2026 in Liechtenstein. This framework enhanced Liechtenstein’s credibility in Washington through regulatory openness, willingness to cooperate on security matters, and a proactive digital strategy.
Swiss Measures to Mitigate Damage
Switzerland initiated intensive negotiations with the US government as early as May 2025. President Karin Keller-Sutter and Vice President Guy Parmelin presented an investment package worth CHF 150–200 billion to strengthen US industries and offset the trade deficit. The aim was to achieve a tariff reduction or a transitional arrangement.
High-profile talks with US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer resulted in a temporary transitional arrangement with a tariff of 10 percent until 7 August 2025. These negotiations also highlighted Switzerland’s position as the fourth-largest foreign investor in the United States. Nevertheless, no final agreement was reached.
The Swiss Federal Council is now seeking, in the final days of talks, a reduction to the EU level of 15 percent. SECO is currently examining coordinated measures with the EU, while political debates continue about potential countermeasures and, in particular, presenting an even more attractive offer to the US. On 5 August 2025, Keller-Sutter and Parmelin travelled to Washington with a small delegation for last-minute negotiations.
Is a Deal Still Possible?
The likelihood of an agreement before 7 August 2025 is assessed by the authors as low. Reasons include the short negotiation timeframe and accusations of insufficient flexibility towards Switzerland. Moreover, Switzerland remains isolated and lacks the bargaining power of a bloc such as the EU.
Another indicator of the difficult situation was the phone call between President Keller-Sutter and President Trump on 31 July 2025, described as heated and ending without breakthrough. Trump even publicly criticised Keller-Sutter on American television.
Jamieson Greer, the US Trade Representative, subsequently stated on a US broadcaster that the tariffs were “as good as set.” Whether a solution can be reached by the 7 August deadline ultimately depends on the will of the US President.
Switzerland’s Capacity for Concessions – and Their Limits
Unlike the EU, Switzerland can make only limited concessions. A reduction of tariffs on U.S. products would be possible solely for agricultural goods, as Switzerland abolished tariffs on industrial goods in 2024. Consequently, this is likely to be of limited value to the United States.
Energy imports from the US in the form of liquefied natural gas (LNG) are technically challenging due to Switzerland’s lack of LNG infrastructure. Imports via neighbouring countries are possible but expensive and complex. Switzerland instead offers substantial investments in US companies – a significant but less direct lever than LNG commitments.
Particularly relevant is Switzerland’s pharmaceutical industry, with companies like Novartis and Roche accounting for around 60 percent of Swiss exports to the US – a key factor in the US trade deficit. Trump’s push for lower domestic drug prices is politically motivated. A similar dynamic applies to gold refining, where raw gold is imported and re-exported as refined gold – artificially inflating the trade deficit without reflecting real imbalances.
Overall, Switzerland’s bargaining power remains limited, restricting its room for manoeuvre.
Economic Impact of a 39 Percent Tariff
Should the tariffs come into full effect on 7 August 2025, the consequences for Switzerland would be significant:
|
Sector |
Forecasted impact |
| Export volume to USA | Decline by 20-30% (approx.CHF 10-18 billion) |
| Industries affected | Watches, pharmaceuticals, machinery most impacted |
| Jobs | 10.000–20.000 at risk |
| GDP growth | Contraction by 0.3-0.7% in 2025 (SECO) |
| Inflation | Increase by 0.5-1% due to higher US impact costs |
| Exchange rate | Likely depreciation of the Swiss franc |
Companies not necessarily dependent on the Swiss brand image may consider relocating production or export channels, partly towards the EU or third countries with better tariff conditions.
Strategic products for the US, such as pharmaceuticals or precious metals, remain exempt from punitive tariffs. However, a fundamental legal uncertainty persists, as future expansion or selective application of tariffs cannot be ruled out.
The Swiss–Liechtenstein Customs Union: Legal and Economic Implications
Although Switzerland and Liechtenstein have formed a customs union since 1923, WTO rules allow differential treatment by third countries. The determining factor is the origin of actual value creation, not the customs administration framework.
For Swiss companies, Liechtenstein may represent a supplementary location for production or logistics relocations. However, such steps require substantial value creation on site; mere re-routing is insufficient and may trigger US scrutiny for tariff circumvention. Liechtenstein’s limited capacity also restricts this option, making it viable only for specific cases rather than as a systematic approach.
Recommendations for Companies
Companies with significant US exposure are well advised to carefully analyse the new tariff situation and adjust their strategies accordingly. This includes assessing where value creation occurs, determining whether existing structures can be maintained or if geographic diversification of production and export sites is required, and understanding US customs classifications and Rules of Origin.
In some cases, Liechtenstein may offer a complementary option, particularly for production or distribution shifts with substantial local value creation. However, early review of regulatory, tax and logistical frameworks is essential. Medium- to long-term strategies may also involve investments in the United States itself, such as establishing production facilities or joint ventures, as part of a broader hedging strategy.
FS+P AG stands ready to assist companies with legal assessments, structural realignments, and operational implementation of export and location strategies – independent, solution-oriented, and cross-border.
Economic Implications for the Customs Union
Switzerland remains confronted with tariffs far above European levels. It is now crucial to observe how these unequal tariff rates affect exports from the joint customs union.
While Liechtenstein formally benefits from lower tariffs, its economy is closely intertwined with Switzerland. Many Liechtenstein companies supply Swiss customers or are part of cross-border value chains. Accordingly, there is a risk that the burden on Switzerland will also spill over to Liechtenstein – for example, through declining orders, more complex logistics or regulatory uncertainties within the customs union.
The lower tariff rate provides Liechtenstein with selective location advantages for targeted investments or specific export projects. However, systematic relocation of economic activities is neither realistic nor desirable, as it could jeopardise the balance within the customs union.
Against this backdrop, the authors call for a swift reduction of US tariffs on Switzerland to a fair level of 15 percent, in line with prevailing circumstances.