The U.S.-Switzerland Trade Relationship and Trump's Criticism
Donald Trump, the former U.S. president, made a notable comment during a telephone interview with CNBC on Tuesday, expressing that he did not know the lady in question but found her to be quite nice. However, he claimed she wasn’t listening. This statement came in reference to Swiss President Karin Keller-Sutter, who had spoken with him on July 31. Following this conversation, Trump imposed a 39% tariff on imports from Switzerland, arguing that the country was stealing from the U.S. due to its $40 billion trade surplus.
Despite the visit of Federal President Karin Keller-Sutter and Swiss Minister of Economic Affairs Guy Parmelin to Washington, no significant breakthrough has been achieved in resolving the tensions. Trump’s stance on the issue appears to be more driven by his own narrative than by factual data.
When considering only goods and excluding services, the U.S. actually imports more from Switzerland than it exports, according to U.S. data. In 2024, the trade deficit in goods alone was $37.9 billion. Moreover, the overall trade deficit in goods and services was only $8.2 billion. Trump’s rationale for imposing punitive tariffs on Switzerland included claims about the high cost of pharmaceuticals and demands for customs duties of 1%. However, the agreement approved by Trump’s ministers initially called for tariffs of 10%, which contradicts his statements.
Switzerland does not impose industrial tariffs, and Swiss companies have significantly invested in the U.S. in recent years. Despite its small size, Swiss companies are the sixth largest foreign investors in the U.S. This investment is partly reflected in the trade surplus in goods, which can be seen as an expression of the confidence Swiss companies have in the U.S. market. Their American subsidiaries often source intermediate inputs from Switzerland.
According to U.S. statistics, Swiss direct investment in the U.S. reached an impressive $358.2 billion at the end of 2024. Switzerland ranks sixth in terms of foreign investment, ahead of France, South Korea, and Italy. Direct investments are defined as all investments in companies that are at least 10% controlled by a foreign investor.
Trump has emphasized the need to bring manufacturing back to the U.S., particularly targeting the pharmaceutical industry, which accounts for 48% of Swiss exports. Swiss companies, especially those in the pharmaceutical sector, have indicated they could invest an additional $150 billion in the U.S. provided the environment remains favorable.
The Significance of Swiss Investments in the U.S.
When examining the scale of investments relative to the size of the country, the importance of Swiss investments becomes even clearer. Dividing the total amount of $358.2 billion by the number of inhabitants in Switzerland results in a per capita investment volume of approximately $40,000. If only investments by Swiss companies are considered, excluding those by U.S.-dominated firms, Switzerland ranks third behind Ireland and Luxembourg with just under $30,000 per capita. Countries such as Australia, France, and the United Arab Emirates invest significantly less relative to their size.
Beyond the EU market, the U.S. is the most important investment destination for Swiss companies. The presence of approximately 4,000 Swiss subsidiaries across all 50 states highlights the extensive reach of Swiss businesses. Companies like Novartis, Roche, Nestlé, Stadler Rail, and Partners Group employ over 400,000 people in the U.S., with around 40% working in industry. Adding jobs created through trade relations with Switzerland brings the total to over 650,000.
Swiss companies also contribute to high wages in the U.S., with employees earning an average of $109,000 annually—among the highest in the country. Additionally, these companies invest heavily in research and development, contributing over $10 billion yearly to innovation. They also pay billions in corporate taxes, with $6.7 billion in 2019 alone.
Key Swiss Investors in the U.S.
Several major Swiss companies have made substantial investments in the U.S.:
- Roche: Investing $50 billion over five years, the Basel-based pharmaceutical company is expanding its presence in research, production, and clinical development across several U.S. states.
- Novartis: Allocating around $23 billion for biotechnology, digitization of clinical trials, and new production capacities.
- Nestlé: Operating dozens of production facilities in the U.S. and employing tens of thousands of people.
- ABB: Focusing on automation, robotics, and energy infrastructure with multiple manufacturing facilities.
- UBS: Expanding its U.S. business in asset management and planning to build a leading wealth management platform.
- Zurich Insurance Group: Deeply rooted in the U.S. insurance market through subsidiaries like Farmers Insurance.
- Partners Group: Managing over $80 billion in the U.S., invested in infrastructure, private equity, and real estate.
- Stadler Rail: Operating a plant in Salt Lake City with around 500 employees and planning to hire 300 new employees by 2028.
- Kudelski Group: Primarily active in Arizona, focusing on cybersecurity and encryption technologies.
- HBM Healthcare Investments: Investing broadly in U.S. biotech companies and driving the development of innovative therapies.
Conclusion
While Trump has focused his criticism on the trade deficit in goods and the high prices of Swiss pharmaceutical products, this perspective does not fully reflect Switzerland’s role in the U.S. economy. Few countries invest as much trust and capital in the American economy as Switzerland does. If Trump were Swiss, he might argue that the U.S. steals $40,000 from every Swiss citizen annually.