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Swiss stocks fell on Monday as investors reacted to the shock 39 per cent tariff imposed on the country by US President Donald Trump last week.
The Swiss Market index, the country’s main stock index, fell as much as 1.9 per cent in early trading, before recovering some ground to trade 0.5 per cent lower on the day.
Swiss bank UBS dropped as much as 3.3 per cent before recovering to trade 0.3 per cent lower on the day. Luxury company Richemont was down 1.5 per cent by early afternoon.
Swiss officials were blindsided last week when Trump announced that the country would be hit with one of the highest import tariffs of any US trading partner. Last month, the EU, of which Switzerland is not a member, struck a deal with Washington for a broad levy of 15 per cent.
The Swiss market was closed for the Alpine country’s national day on Friday, making Monday’s trade the first opportunity for investors to react to Trump’s tariffs.
Elsewhere in Europe, stocks were higher on Monday, as they recouped some ground after Friday’s sharp declines, which followed the new tariff announcements and weak US jobs data. The Stoxx 600 gained 0.6 per cent and Germany’s Dax added 1.3 per cent.
The Swiss government said on Monday it was “ready to present a more attractive offer” to the US in a bid to “ease the current tariff situation”.
Following Trump’s tariff announcements last week, analysts at Swiss private bank Lombard Odier cut their forecast for 2025 GDP from 1.1 per cent to 0.9 per cent, citing the levies and associated uncertainties over US-Swiss trade.
“The longer such tariffs stay in effect, the bigger the risks for the Swiss economy,” they added. “We expect Bern to intensify its negotiations with the Trump administration.”
Switzerland is particularly reliant on exports to the US because it is home to some of the world’s biggest pharmaceutical companies.
As well as announcing tariffs on Thursday, Trump also demanded “binding commitments” from global pharmaceutical groups to lower prices for US consumers, sending share prices falling across the industry.
Shares in Swiss pharmaceutical company Roche were trading 1.5 per cent lower on Monday.
Lombard Odier said its growth forecast would decline further if the global pharmaceutical industry were hit with higher levies.
The Swiss franc continued to slide against the euro, slipping 0.4 per cent on top another 0.5 per cent fall on Friday.
The Swiss currency has soared this year in response to the turmoil prompted by Trump’s erratic policymaking, as investors have sought alternatives to US assets.
The move prompted the Swiss central bank to cut interest rates to zero to tackle lagging inflation and the strong currency, while investors have bet it could go as far as implementing negative rates.
The yield on the two-year Swiss government bond, which tracks interest rate expectations, fell 0.05 percentage points on Monday to minus 0.17 per cent, taking it to its lowest since mid-June.
“If those tariffs stick, this will add to the disinflationary forces in Switzerland, which are keeping CPI near 0 per cent year on year,” said Chris Turner, global head of markets research at ING.
This article previously incorrectly included a share price for Rolex