Publications
Swiss Economic Diplomacy in Transition
Multinational companies emerge as diplomatic actors, revealing a shifting hybrid economic governance.
The number seven is often considered a lucky number. Across cultural, religious, and mathematical traditions, it symbolizes harmony and balance. It also marked a singular moment in Swiss economic diplomacy: seven individuals facing Donald Trump — including a “Team Switzerland” made up of six industrial leaders dispatched to Washington in an effort to mitigate the 39% tariff imposed on Swiss exports.
What caught the attention of financial markets was not the diplomatic staging, but the deeper question it exposed:
Does the Washington episode signal a lasting shift in economic power in Switzerland — from political institutions to its global industrial leaders? Or was it merely an exceptional response to extraordinary circumstances?
This dilemma comes at a moment when Swiss corporates occupy a central position in global value chains. Firms such as Nestlé, Roche, Novartis, ABB, Holcim, Richemont, Lonza, Sika, and Partners Group operate on a scale well beyond the borders of Switzerland with global reach. Collectively, the SMI companies generate well over half of their revenues outside Europe. For many of them, the United States is now their most strategic market: tens of billions annually for the pharmaceutical industry; a structural dependence of precision manufacturers on US capital-expenditure cycles; and a decisive reliance of luxury groups — including privately held firms like Rolex — on US consumer demand.
Thus, when Washington announced a 39% tariff effective 1 August 2025 — with the notable exception of pharmaceutical products — the entire Swiss industrial fabric came under pressure. The decision also exposed the limits of Switzerland’s traditionally consensual diplomacy, which proved ill-equipped to confront a tariff shock of this magnitude. What had been a carefully managed effort to modernize the Swiss tariff regime abruptly turned into crisis management.
Faced with urgency, Swiss CEOs quickly understood that traditional diplomatic channels would not suffice. Swiss companies, thanks to their global networks and operational agility, possessed negotiation leverage the state could not match. Their presence in the United States is substantial: production sites, logistics hubs, direct investments, and tens of thousands of jobs spread across multiple states.
The measures put forward ranged from shifting part of the precious-metals refining process to the United States, to announcing additional pharmaceutical investments, to adjusting aircraft procurement channels to improve the appearance of the bilateral trade balance.
These initiatives — whether concrete or accounted for — aligned far more effectively with US priorities than traditional diplomatic signaling. They offered a degree of immediate, operational action that the state simply could not provide.
The result was significant: a memorandum of understanding capping the tariff at 15%. And an implicit conclusion emerged: seven industrial leaders achieved in a matter of days what the Swiss administrative machinery had failed to secure in several weeks.
This episode raises a central question for Switzerland’s future economic strategy: was the reliance on private-sector leadership merely an emergency response to a specific shock, or does it signal a structural rebalancing of power in favor of globally integrated industrial actors?
Several elements support the hypothesis of a structural shift:
– a global geopolitical environment that is increasingly transactional, where economic weight matters more than diplomatic form;
– the growing exposure of Swiss companies to the US market;
– their ability to act quickly when profits and global supply chains come under threat.
Conversely, there are reasons for caution:
– Switzerland’s institutional architecture, based on political legitimacy and direct democracy, would likely resist any long-term shift toward business-led diplomacy;
– diplomacy conducted in parallel by the private sector raises immediate transparency concerns;
– some issues cannot be resolved through corporate leverage, particularly those involving regulation, security, or macro-geopolitical negotiations.
For markets, the lesson is clear: Switzerland appears to be entering an era of hybrid economic diplomacy, in which the state and multinational corporations increasingly act in tandem — sometimes complementing each other, sometimes with a degree of tension — to defend national interests.
December 01, 2025
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