Swiss shares fall as the country feels the wrath of Trump’s tariffs
Shares in Swiss firms dropped on Monday morning as markets digested the consequences of US president Donald Trump’s high tariffs.
The Swiss Market Index dropped by 1.9 per cent to 11,835 francs upon opening this morning, before easing its losses to trade at 1.54 per cent down. It clawed its way back to 0.77 per cent at midday.
Swiss officials initially believed they were on track to secure a low tariff deal last week but diplomats were shocked as Trump slapped them with a 39 per cent tariff on Friday, one of the highest implemented of any of its top trading partners.
Investors were forced to wait to access their stocks over the weekend due to a national holiday on Friday, with many of the exchange’s biggest names recording losses in early trading.
Pharma takes the heat
Switzerland’s leading pharmaceutical companies, among the country’s biggest exporters to the US, suffered selloffs as Trump continued to wage war against the sector in his efforts to increase pharmaceutical manufacturing on US soil.
Novartis shares suffered a 1.36 per cent loss, trading at 92.91 francs, (£86.41) while rival Roche fell 1.83 per cent to 252.10 francs.
Pharmaceutical manufacturing company Lonza Group fell 1.61 per cent to 562.80 francs.
The Swiss pharmaceutical sector sends 60 per cent of its exports to the US, with Novartis and Roche’s US subsidiary Genetech pledging billions of dollars of US investment this year.
The companies did not manage to shake off the Trump administration’s letter last week demanding that they lower drug prices for US consumers despite its efforts to placate his anger against the sector.
Swiss trade in turmoil
Swiss corporate voices have now lashed out at the pharmaceutical sector for ruining negotiations between the two parties, leaving trade between the two in turmoil until talks resume.
Georges Kern, the boss of luxury watchmaker Breitling, reportedly said Switzerland was being “held hostage” by the industry, while other companies with a large US presence recorded losses.
Chocolate maker Nestle recorded a 0.21 per cent loss, trading at 70.95 francs, while shares in Swiss bank UBS dropped 1.54 per cent to 29.97 francs.
The US is not Switzerland’s largest trade partner but its exports to the US account for roughly 18.7 per cent of all its global exports, totalling 51.35bn francs ($63.4bn).
Exports accounted for 72 per cent of Swiss GDP in 2024, with the US standing as a major trading partner during the year, adding to the significant blow of the tariffs.
The Swiss franc fell for a second time against the euro, dropping 0.3 per cent on top of a 0.5 per cent loss on Friday to €1.07.
The currency also fell against the dollar on Monday by 0.7 per cent to $1.24.