BERN — 26 August 2025. About a third of Swiss mechanical and electrical engineering companies plan to transfer part of their operations to the European Union following the imposition of steep U.S. tariffs and a sharp appreciation of the Swiss franc, according to industry association Swissmem.
In a survey conducted after the new levy took effect on 7 August, 31% of respondents said they were preparing to move some activities across the border to mitigate the impact on competitiveness.
Switzerland was this month assigned one of the highest U.S. tariff rates worldwide, at 39%, compared with 15% for the neighbouring EU. At the same time, the franc has strengthened by roughly 13% against the U.S. dollar since the start of the year, adding further pressure to export margins. The combined shock has squeezed order books and prompted companies to reassess production footprints, particularly those with material exposure to the U.S. market.
Swissmem President Martin Hirzel said firms were already organising to streamline and, where necessary, relocate. ‘Dismissals are inevitable,’ he told reporters in Bern, adding that the scale would depend on how quickly political efforts could lower the U.S. tariff rate for Swiss goods. The survey received 385 responses from member companies, giving a snapshot of sentiment across the country’s machinery, electrical and metals sectors.
Official trade data for the first half of 2025 show goods exports from Switzerland’s technology industry fell 0.9% year-on-year, Swissmem said. The decline was driven by negative trends in Asia and flat demand in Europe, with the second quarter described by the association as particularly worrying. While exports to the United States rose sharply in the first quarter, that momentum reversed after Washington signalled tariff action in April. Overall order intake fell 13.4% year-on-year in the second quarter.
Companies considering a shift to the EU appear to be focused on partial moves that would preserve core manufacturing and engineering in Switzerland while relocating certain phases—such as final assembly, logistics, or specific product lines—inside the single market. Locating operations within the EU would align exports with the lower tariff rate applied by the United States, while also shortening lead times for European customers in a period of subdued demand.
The currency backdrop has amplified the tariff effect. The franc’s safe-haven status has lifted it against major currencies this year, making Swiss-made goods relatively more expensive abroad. For exporters working with long order cycles and thin pricing power, a double hit from tariffs and exchange rates can erode margins quickly. Some firms have hedging arrangements, but many are facing difficult choices on pricing, cost reductions, and footprint optimisation as contracts renew.
Employment is an immediate concern. Hirzel’s warning on layoffs reflects corporate plans to adjust capacity to weaker order books and to reconfigure operations for tariff mitigation. The association did not quantify the potential number of job losses, and the outcome will depend on policy developments as well as how quickly companies can execute relocations. For now, management teams are prioritising continuity of supply and customer retention in the U.S. and EU markets.
Swissmem’s figures suggest the demand picture deteriorated as tariff risks crystallised. The rebound in U.S.-bound shipments earlier in the year appears to have given way to order postponements and cancellations from April, when the tariff threat became explicit. With European demand stagnating and Asian orders declining, Swiss exporters are facing a broad-based slowdown at a time when cost structures are under strain from currency effects.
Industry executives are seeking clarity on trade terms while assessing medium-term options. Partial transfers to the EU could proceed relatively quickly for firms with existing subsidiaries or contract manufacturing in the bloc. Others may use tolling arrangements or expand partnerships to keep supply chains flexible while avoiding the most punitive tariff exposure. The balance will vary by product complexity, certification requirements, and customer location.
Swissmem said the immediate business trend remains weak, and that visibility is limited. The association’s survey highlights the speed with which policy and currency changes are feeding through to corporate decisions in Switzerland’s export-oriented technology sector. Whether the planned transfers become permanent will depend on the trajectory of U.S. tariffs, the franc, and demand conditions in key markets over the coming quarters.
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