No celebration for Switzerland this August 1st

Switzerland celebrates its National Day on August 1st, but this year’s festivities will be overshadowed by the imposition of arbitrarily fixed 31% U.S. tariffs—punitive measures that are both harsh and difficult for the Swiss to understand, especially as they have consistently followed the rules of globalization with elegance and restraint.

The Context First

According to the U.S., the reasoning behind these tariffs is based on a $38.5 billion trade deficit, yet this American logic lacks macroeconomic rigor and, more importantly, qualitative discernment.

Swiss investments in the United States amount to $300 billion, making Switzerland the 6th largest foreign investor in the country. Even more remarkable: with $10.3 billion invested annually, Switzerland is the top foreign investor in U.S. research and development (R&D). Swiss subsidiaries directly support half a million jobs in the U.S., with an average salary of $131,000 per year—the highest among the top seven foreign investor nations. Around 500 Swiss companies operate in the U.S., paying $6.7 billion in annual income taxes, placing them third among foreign corporate taxpayers in America.

So, Why the Tariffs?

Swiss customs figures reveal the scale of trade flows that likely triggered these excessive 31% tariffs imposed by the Trump administration. In December 2024 alone, Switzerland exported 64.2 metric tons of gold to the U.S.—eleven times more than in November, just before or shortly after Donald Trump’s re-election. This trend intensified in January 2025, with gold exports reaching a record 193 tons, worth over $18 billion in that single month. In other words, January 2025 alone accounted for nearly half of Switzerland’s annual trade surplus with the United States.

Yet, this undeniable surge in Swiss gold exports to the U.S. is a direct response to fears of future tariffs. Anticipating broad duties on gold, American buyers—retailers, investors, speculators—rushed to import massive quantities of gold to New York, trying to beat potential surcharges. This led to substantial market distortions. As the world’s leading center for gold refining and transit, Switzerland played a crucial role in this process. It imported 400-ounce gold bars from London, melted them down, and recast them into 1-kilogram bars suited for the New York COMEX exchange.

Ironically, it was this American gold rush that led to the blanket imposition of 31% tariffs on all Swiss exports. By comparison, tariffs on the European Union are “only” 15%.

Originally intended to protect domestic markets, such tariff policies show how they can distort global trade flows and create needless and unjustified frictions. This dramatic surge in Swiss gold exports to the U.S. is clearly a market reaction to policy uncertainty, not a reflection of any real economic imbalance between the two nations. In this case, Switzerland’s only “fault” is being a global hub for gold refining.