By Barbara Kollmeyer
Pharmaceuticals and chocolate are sliding
In the first opportunity to react to a shock 39% tariff against the country’s exports announced by President Trump last week, stocks in Switzerland retreated on Monday.
The benchmark Swiss Market Index SMI CH:SMI fell around 1%, paring earlier losses, but most constituents were in the red – such as building materials giant Holcim (CH:HOLN) and the country’s major pharmaceutical names – Novartis (CH:NOVN) (NVS) stock fell around 1%, though its U.S.-listed shares rose 1.3% on Friday. Roche shares (CH:ROG) fell nearly 2%.
Chocolate makers were also hit, with Barry Callebaut stock (CH:BARN) down 2.6% and Lindt (CH:LISP) down over 1% and among the top decliners on the Stoxx Europe 600 XX:SXXP. Watchmaker Swatch Group (CH:UHR) rose modestly and luxury group Richemont (CH:CFR) fell 0.8%.
The Swiss franc fell against both the euro (CHFEUR) and the dollar (CHFUSD), continuing weakness seen Friday.
The U.S. tariff on Switzerland – from a previously proposed 31% – will go into effect on Aug. 7 if the two countries cannot reach agreement before that. That’s after a 15% import tariff was agreed by the E.U. with the administration of President Trump.
Pharmaceuticals, though, may escape the worst of tariff’s wrath, say economists.
“These baseline tariffs will not apply to goods covered by sectoral tariffs or under investigation for sectoral tariffs, most notably pharmaceutical goods which account for more than a third of Swiss exports to the U.S.,” said a team of Goldman Sachs economists led by Sven Jari Stehn.
Goldman and others expect a trade probe into pharmaceuticals by the U.S. to result in an across-the-board 25% tariff on pharmaceutical imports. Goldman said that would come into effect in early 2027.
The White House said last week that President Trump would be sending letters to major pharmaceutical companies, outlining their task of bringing down prescription drug prices for U.S. consumers. Novartis was among the companies it said would get a letter.
Nomura analysts said it’s possible Switzerland will get an exemption on the pharmaceutical tariff if it manages to negotiate a deal with the U.S.. “The sector has been high on the agenda for the Swiss government during negotiations, and Bloomberg previously reported that a trade deal would likely contain assurances on a pharmaceutical tariff,” said a Nomura team led by Josie Anderson.
Swiss President Karin Keller-Sutter told Reuters on Friday that her government would continue talking to Washington, but as U.S. imports already had 99.3% free market access, it was “really difficult to give more.”
-Barbara Kollmeyer
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08-04-25 0445ET
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