Impact of US custom policies on the chemical & pharmaceutical industry

The United States is the most important export market for the Swiss chemical, pharmaceutical and life sciences industries. The successful conclusion of the negotiations with the U.S. is essential for Switzerland as a business location. A return to the situation prior to November 14, 2025 is not an option. Although the chemical, pharmaceutical and life sciences industries, measured by their total exports to the U.S., were less affected by the reciprocal U.S. tariffs than other industrial sectors, the additional duties were nevertheless critical for the companies concerned.

The U.S. is the most important export destination for our member companies in the chemical-pharmaceutical industry. In both exports (67 percent of total exports, excluding gold) to the U.S. and imports (42.3 percent of total imports, excluding gold) from the U.S., products of the chemical-pharmaceutical industry rank first in merchandise trade. In 2025, pharmaceutical active ingredients and pharmaceutical specialties/other products accounted for 94.7 percent of our industries’ total exports to the U.S., while other organic basic substances and chemicals accounted for 3.7 percent. More than 98 percent of goods exports were exempt from U.S. reciprocal tariffs.

There is no alternative to a successful conclusion to the negotiations

A successful conclusion of the tariff negotiations between Switzerland and the United States is of outstanding strategic importance for the Swiss chemical, pharmaceutical and life sciences industries. The United States is one of the most important trading partners of these key sectors—as a sales market, driver of innovation and investment location. Open and reliable trade conditions are therefore not a minor detail of economic policy, but a central prerequisite for competitiveness, value creation and high-quality jobs in Switzerland.

Particularly in highly specialized industries with globally interconnected supply chains, tariff barriers and regulatory frictions have a direct impact on production costs, market access and investment decisions. A modern and ambitious negotiation outcome would reduce trade barriers, simplify administrative processes and strengthen cooperation along transatlantic value chains. This would not only increase planning certainty for companies, but also promote innovation and growth on both sides.
Against the backdrop of increasing geopolitical uncertainty, a stable economic partnership with the U.S. is gaining additional importance. A successful conclusion of the tariff negotiations would send a strong signal in favor of open markets, international cooperation and the long-term safeguarding of the competitiveness of Switzerland’s key industries. For the chemical, pharmaceutical and life sciences sectors, such an outcome is not only desirable—it is essential.

Supply of medicines jeopardised by tariff increases

An increase of the base tariff to 15 percent is less drastic than increases to 31 or 39 percent, but depending on the type of product and business model, it can already have negative effects. Particularly critical are medicines, their active ingredients and raw materials: rising production costs could jeopardize the supply of essential pharmaceuticals. Prices for patients would also generally rise significantly. 

Tariffs at this level also threaten internationally established supply chains. Especially for life-saving medicines, disruptions could lead to serious supply shortages. The COVID-19 pandemic has demonstrated how crucial functioning supply chains are for the provision of critical medicines. The U.S. pharmaceutical industry is highly dependent on specialized suppliers in Switzerland and the EU. Protectionist measures of this kind would therefore not only burden the economy, but also significantly hinder and increase the cost of patients’ access to necessary therapies.

Impact on Prices, Contracts and Competitiveness

Higher tariffs could prompt companies to consider price increases for affected products. However, due to administered prices, this is not possible in every case. In negotiations with international customers, price increases may therefore face resistance and may not always be enforceable. Companies with long-term export contracts may need to renegotiate existing agreements in order to offset increased costs. Products with unique selling points are generally easier to adjust in price in such cases than highly standardized products with many competitors.

Switzerland is a key player in the pharmaceutical industry. Trade barriers could disrupt established supply chains and significantly increase production costs. This would not only impair the competitiveness of the sector, but also negatively affect research, development and innovation. Ultimately, patients would be most affected, as the supply of life-saving medicines could be jeopardized.

Impact on Switzerland as a Production Location

The U.S. is the most important pharmaceutical market. Some companies have announced investments in the U.S. It is currently not possible to assess the extent to which this will affect Switzerland as a production location. In the short term, no effects are expected; in the long term, this will depend on which products are to be manufactured in the U.S. and for which markets.

Switzerland in the midst of protectionist measures

The announced U.S. tariff increases deliberately threaten established trade flows and could trigger a domino effect of international countermeasures. The EU has already prepared countermeasures, and China has partially implemented them. Such protectionist interventions directly endanger established supply chains and could affect companies in Switzerland as well as subsidiaries and customers worldwide. An escalation leading to a trade war must be avoided. It is therefore of central importance for Switzerland to be exempt from any possible EU countermeasures. Experience with the EU’s steel safeguard measures has shown how quickly protectionist barriers can significantly increase costs and undermine competitiveness. Close dialogue with the relevant authorities is therefore essential—both economically and in terms of foreign policy.

The EU is by far our most important trading partner: more than half of our exports go to the EU, and over four-fifths of all imported chemical-pharmaceutical products originate there. Unhindered access to the single market is crucial not only for the competitiveness of Swiss industry, but also for research, innovation and patient care. Any disruption of this access would have immediate economic consequences and could even jeopardize public support for the Bilateral Agreements III.

The message is clear: Swiss companies must not become pawns in international trade conflicts. It is about supply chains, jobs, innovation—and ultimately about serving people’s needs.

Politics and administration are challenged

Swiss companies need planning and legal certainty as well as favorable framework conditions in order to compete globally. Factors such as the availability of highly qualified workers, secure access to affordable energy, lean regulations and their pragmatic implementation, and good access to all key markets are of central importance.

Switzerland must ensure tax predictability, reward innovation domestically and make it rapidly available, and develop a visionary strategy for favorable framework conditions in areas with high innovation potential.

Increasing regulatory density and high energy costs in Switzerland pose challenges for companies. Accordingly, unnecessary regulations and additional financial burdens on businesses must be avoided — proposals that could potentially impose further burdens on Swiss companies must undergo critical review. Technology bans should be avoided in order to maintain Switzerland’s position as a leading innovation hub.

From the perspective of scienceindustries, business and policymakers should jointly take measures to safeguard and strengthen Switzerland’s competitiveness and attractiveness as a business location:

• Politically, trade barriers must be consistently dismantled, no new regulations that burden companies should be introduced, and the stability of relations with the EU—through the continuation of the Bilateral Agreements III—as well as with key global trading partners must be secured. A clear political commitment to open markets and WTO-compliant free trade is essential
   
• Economically, we recommend that companies actively enhance the diversification of sales and procurement markets as well as the resilience of supply chains, and place greater emphasis on innovation, digitalization and efficiency gains.

scienceindustries is therefore committed to ensuring that Switzerland continues to firmly advocate for open markets, stable international trade rules and constructive dialogue at all levels.