Swiss economic growth surges as firms race to beat U.S tariffs

By John Revill

ZURICH (Reuters) -The Swiss economy grew by 0.8% in the first three months of 2025, the government said on Monday, its fastest quarterly growth rate in two years, as companies rushed through exports to avoid looming U.S. tariffs.

Shipments of pharmaceuticals, chemicals, watches, and precision instruments surged as Swiss companies upped exports to the United States before trade duties imposed by the administration of President Donald Trump took effect.

"In particular, exports to the U.S. rose sharply, pointing to possible front-loading in connection with U.S. trade policy," said the State Secretariat for Economic Affairs.

As a result, Swiss gross domestic product expanded by 0.8% compared to the same period last year and double its long-term average quarterly growth rate. The increase was its biggest since the first quarter of 2023.

Swiss manufacturers were stunned when the U.S., Switzerland's biggest trading partner, announced 31% tariffs on the European country in April.

The figure has since been temporarily cut down to 10%, with Swiss politicians eager to secure a lasting agreement in the coming weeks.

Small and mid-sized Swiss engineering companies have expressed concern over the uncertainty.

Foreign customers were less willing to invest in new machinery, industry association Swissmechanic said, while the strong appreciation of the Swiss franc was an additional burden.

Many orders for machinery and equipment have been put on ice or cancelled, said Swissmechanic President Nicola Tettamanti, as companies delayed investment decisions.

"Everybody is in wait-and-see mode, and that means no orders," Tettamanti said. "Business uncertainty is as high as it was during the COVID pandemic, and we will see the effect of this on GDP and the labour market in the next few months."

The Swiss Purchasing Managers' Index fell by 3.7 points to 42.1 in May, data showed on Monday, its lowest level since May 2023 and well below the growth threshold of 50 points.

(Reporting by John Revill, Editing by Friederike Heine and Saad Sayeed)