Published: November 11, 2025
Key points
- President Donald Trump said the U.S. is “working on a deal” with Switzerland to lower the 39% tariff rate the U.S. imposed in August. [1]
- Bloomberg reporting indicates negotiators are closing in on a revised ~15% rate—potentially within two weeks—though nothing is final. [2]
- Swiss watchmakers rallied on the news: Swatch Group rose ~4% and Richemont gained ~2% in early trade. [3]
- The 39% rate has applied to most Swiss exports since August 7, 2025, following a July 31 executive order; the EU effectively faces a 15% baseline under that framework. [4]
What’s new today
The U.S. and Switzerland appear to be edging toward a breakthrough that would slash the punitive 39% “reciprocal” tariff Washington placed on Swiss goods this summer. Speaking in the Oval Office on Monday, President Trump said, “We’re working on a deal to get their tariffs a little bit lower,” confirming active talks but declining to name a number. [5]
Multiple outlets report the target under discussion is around 15%, aligning Switzerland with the effective baseline rate applied to European Union goods under the current U.S. tariff regime. Bloomberg’s update this morning says a deal could be wrapped up in the next two weeks, while stressing negotiations remain fluid. [6]
Markets quickly reacted: shares in Switzerland’s luxury watch giants advanced on optimism that a tariff cut would ease margin pressure and temper price hikes for U.S. consumers. In early trading, Swatch climbed roughly 4.2%, while Richemont added about 2%. [7]
Why it matters
The U.S. is the largest market for Swiss watches, accounting for about 19% of the sector’s exports, according to the Federation of the Swiss Watch Industry. A meaningful tariff reduction would provide immediate relief to brands spanning the entry-luxe to haute horlogerie spectrum, from Tissot and Longines to Cartier and IWC. Analysts note that returning closer to a 15% rate could ease profitability pressures and reduce the need for further retail price increases stateside. [8]
Exposure varies by company: Richemont derives an estimated ~21% of group sales from the U.S., while Swatch generates ~15% there—one reason investors see Swatch as particularly sensitive to tariff headlines. [9]
How we got here: the 39% “reciprocal” tariff
The current 39% rate traces to a July 31, 2025 White House executive order that revamped America’s “reciprocal tariff” program. Under Annex I of that order, Switzerland’s adjusted rate was set at 39%, with the changes taking effect August 7. By contrast, the EU is effectively held to a 15% baseline (goods with a U.S. MFN duty below 15% are topped up to reach 15%). Switzerland’s State Secretariat for Economic Affairs (SECO) confirms the 39% surcharge has applied since Aug. 7. [10]
Swiss officials have spent the fall trying to unwind the shock measure. Bern publicly acknowledged intensified talks in early August and has kept lines open with Washington as industry groups flagged strain across precision instruments, watches, machinery, and parts of the precious metals trade. [11]
The state of play in Washington and Bern
Diplomatic contacts escalated in recent days. On Nov. 7, Economy Minister Guy Parmelin said he had a “very constructive” conversation with the U.S. Trade Representative focused on the 39% rate. Over the weekend, Swiss business leaders’ outreach in Washington also drew notice in local media, underscoring the private sector’s role in breaking the impasse. [12]
On Monday night, Trump publicly acknowledged Switzerland had been “hit hard” by the U.S. action but called Switzerland a “good ally,” signaling political space to cut a deal. The Swiss government declined to comment on specifics when asked about Bloomberg’s 15% figure, saying talks are ongoing. [13]
Market reaction and industry impact
Equities tied to Swiss luxury rallied today on hopes for a swift reduction. Analysts at major brokerages argue that a move from 39% to ~15% would meaningfully reduce the need for further U.S. price increases, supporting volumes in a crucial end market during the holiday season. The U.S. accounted for 19% of Swiss watch exports last year, reinforcing the sector’s sensitivity to tariff headlines. [14]
Beyond watches, the broader Swiss export complex—from precision engineering to selected precious metals—has warned of disruptions under a sustained 39% rate. Industry groups for gold refining, for instance, flagged concern as certain categories of bullion faced higher duties under the summer changes. [15]
What a 15% deal would look like
A 15% rate would put Switzerland essentially on par with how the U.S. tariff framework treats EU goods, which are effectively leveled up to a 15% baseline depending on the item’s MFN duty. While the exact scope and carve‑outs of a Swiss deal are still being negotiated, the headline number would mark a major improvement from 39% and likely be accompanied by diplomatic or investment sweeteners that have featured in recent Swiss outreach. (Some Swiss firms have already announced sizable U.S. investment pledges in energy and infrastructure as part of the broader thaw.) [16]
Bloomberg’s sourcing cautions that timelines can slip, and previous July talks faltered before the August hike took effect. Still, the White House acknowledgment of “working on a deal” adds political momentum that was missing earlier in the year. [17]
What to watch next
- Timing: Negotiators are aiming for a resolution within about two weeks, per Bloomberg. Any announcement will likely detail the headline rate and implementation date, plus any product‑specific nuances. [18]
- Company guidance: Watch for trading statements from Swatch Group and Richemont that update U.S. pricing and inventory strategy if a lower rate is confirmed. [19]
- Official texts: If a deal lands, look for follow‑on presidential actions or USTR notices amending the July 31 executive order’s annex for Switzerland. [20]
Bottom line
As of November 11, 2025, the U.S. and Switzerland are actively negotiating to reduce the 39% tariff rate that has weighed on key Swiss exports since August. A 15% compromise—now widely expected—would bring tariff relief closer to EU treatment and has already buoyed shares of Swiss luxury groups. The final shape, timing, and scope remain to be seen, but the political signal from the White House and the market’s reaction suggest the tariff shock of the summer may soon give way to a more sustainable landing zone for trans‑Atlantic trade in Swiss goods. [21]
Sources (selected): Trump remarks and Swiss government response; watchmaker market moves; executive order and EU baseline; Aug. 7 start date; diplomacy timeline and sector impacts; industry investment pledges. [22]
References
1. www.reuters.com, 2. news.bloomberglaw.com, 3. www.reuters.com, 4. www.whitehouse.gov, 5. www.reuters.com, 6. news.bloomberglaw.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.whitehouse.gov, 11. www.seco-cooperation.admin.ch, 12. www.reuters.com, 13. www.reuters.com, 14. www.reuters.com, 15. www.reuters.com, 16. www.whitehouse.gov, 17. news.bloomberglaw.com, 18. news.bloomberglaw.com, 19. www.reuters.com, 20. www.whitehouse.gov, 21. www.reuters.com, 22. www.reuters.com
