The SNB is not exactly known for reacting to market movements in a panic or hasty manner. Therefore, in the case of the 39 percent import tariffs imposed by US President Donald Trump on Swiss goods, it can be assumed that the SNB will first wait and observe the impact of these measures on the Swiss economy.

The consequences are assessed differently by economists. If the tariffs are implemented as planned despite renegotiations, they could reduce Swiss economic output, measured by gross domestic product (GDP), by up to 0,5 percentage points per year, according to initial estimates.

Significant Negative Impact

«If the threatened US import tariffs are indeed implemented and remain in place for a longer period, the Swiss economy would face far-reaching negative consequences,» says the Zürcher Kantonalbank (ZKB). Hans Gersbach from the KOF Swiss Economic Institute at ETH Zurich also expects significant negative effects on the economy if the tariff threat is enforced and the high tariff remains in place for a long time.

Industries that would become only partially or not at all competitive include the machinery, electronics, and metal industries, as well as the watchmaking industry. These sectors are not only cyclical but also highly price-sensitive.

Including the exemptions for the pharmaceutical industry and services, which are not affected, the average tariff rate on Swiss exports to the US would rise from the current 6 percent to over 16 percent, writes Matthias Ramser from Reichmuth & Co. Although the US is Switzerland's largest trading partner by country, around 80 percent of exports go to other countries, primarily EU nations with Germany at the top.

Inflation Declines Further

Inflation, which recently stood at a very low core inflation rate of 0,1 percent year-on-year, would likely be further dampened by a tariff-induced economic slowdown.

Hopes for an economic upturn in the EU, particularly in light of planned stimulus packages in Germany, stand in contrast to this. This could at least partially offset the negative effects.

It is well known that the SNB is not committed to any particular industry. Its primary goal is price stability, although the SNB also considers economic developments. This is its contribution to providing stable framework conditions for the entire economy.

Effect Would Be Limited

A further rate cut, for example in September to -0,25 percent, could weaken the Swiss franc, boost exports, and stimulate lending. However, it is doubtful whether the effect would be strong enough to noticeably mitigate the negative consequences of the tariffs. Monetary policy is already extremely expansive.

«Negative interest rates do not help solve or alleviate the politically driven tariff problem,» says Renato Flückiger of Valiant.