Swiss shares Monday (04.08.2025), with the market opening for the first time after Friday’s national holiday amid concerns about the effect of punitive dictatorial 39% on exports imposed by US President Donald Trump, and pressure on pharmaceutical companies to reduce their prices.
The SWISS MARKET INDEX (SMI) stock index declined up to 1.9% in morning transactions, before limiting losses to 0.88% as the duties could eventually be used as a lever in trade negotiations. Despite today’s decline, the index remains increased about 1% since the beginning of 2025.
The two pharmaceutical giants, Novartis and Roche, representing almost 30% of the SMI, fell 0.7% and 1.4% respectively. UBS Group AG lost 1.8%, while Richemont’s shares, owner of Cartier, fell 0.7%. In London, Watches of Switzerland Group recovered 2.7% after a 6.8% drop on Friday.
The Swiss franc fell for a second consecutive day against the euro, by 0.3%, after the highest decline from May (0.5%) on Friday, when the announcements were made by Trump. The Swiss Stock Exchange was closed on Friday.
“Despite the shock caused by the announcement of new duties, the initial decline in the market can be just a transitional phase,” said John Plassard, head of investment strategy at Cite Gestion. “Recent history has shown that external shocks, however violent it is, rarely cause permanent damage to the Swiss economy.”
On Friday, European markets have recorded the biggest decline since April, following the announcement of Trump for a wide package of duties aimed at, among other things, Canada, New Zealand and South Africa. At the same time, the US president sent letters to 17 of the world’s largest pharmaceutical companies, demanding to immediately reduce the prices charged by Medicaid to existing medicines.
Switzerland, known for its luxury watches, chocolates and powerful banks, is one of the largest commercial partners in the US. In 2024, it exported products of more than $ 60 billion to the US market, including medical devices and Nespresso coffee, while medicinal products are a key pillar of exports and the main cause of the US bilateral deficit with Switzerland.
Although medicines are currently excluded from new duties, Swiss officials warn that the industry will be burdened and may be facing separate burdens in the future. Roche and Novartis have already pledged to invest more than $ 70 billion in the US for research, production and distribution in an attempt to calm Washington’s concerns about domestic production.
Interpharma, which represents the industry, warned Friday: “Even if pharmaceuticals are temporarily excluded from duties, the US government is jeopardizing the global supply of innovative drugs. This affects both Swiss research companies and supply within Switzerland. “
After a strong start to the year, the SMI has been left behind the Stoxx Europe 600, partly due to its high defense exposure, while investors are turning into circular sectors, betting on global growth durability.
If US duties are confirmed, Switzerland will have the fifth highest invoice in the world after Brazil, Syria, Laos and Myanmar, and much higher than the EU and the United Kingdom.
“What we are experiencing this week in Switzerland is similar to what happened in early April when the first US duties were announced,” ODDO’s Arthur Jurus said. “The uncertainty about which products, especially in medicines, will be burdened in the future, is a real problem.” However, he added: “Contributing, the shelter offered by the Swiss franc can mitigate part of the pressure on the stock market.”