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Geopolitical tensions and trade policy uncertainties are no longer a distant background noise. For Swiss companies, they are a real factor in investments and strategic decisions. According to an EY study, around 70 percent of companies in Switzerland have stopped or postponed investments due to geopolitical and trade policy uncertainties.

Particularly painful are the recent measures taken by the U.S.: tariffs of up to 39 percent on Swiss exports present many companies with sales markets in the United States with structural challenges. Global supply chains cannot be realigned at short notice. This makes a prudent, long-term approach to these risks all the more important.

Tariffs as a Symptom of Greater Uncertainty

Trade policy from Washington is just one example of how geopolitical tensions directly affect the strategic reality of companies. This uncertainty is also evident in the M&A sector: almost half of Swiss companies plan a merger or acquisition in the next twelve months, but transactions with U.S. involvement are being examined much more cautiously today. Valuation uncertainties, regulatory requirements, and possible tariff burdens are playing an increasingly significant role in decision-making.

«Despite all the risks, Switzerland remains an attractive business location.»

It is therefore important to take a broader perspective. Despite all the risks, Switzerland remains an attractive business location. This is evidenced not least by the sharp rise in foreign investment, especially from the U.S. However, current developments in global free trade and the much-debated tariffs threaten this positioning. Still, legal certainty, innovative strength, and a liberal, reliable legal system are location advantages that carry weight in uncertain times. These strengths must be safeguarded and expanded.

Resilience Instead of Reflexive Reactions

The temptation is great to respond to other countries’ protectionist measures with countermeasures of one’s own. But a hasty withdrawal from international frameworks or reflexive retaliatory tariffs would do more harm than good in the long run. What is needed instead are resilient structures and flexible scenarios that enable both companies and policymakers to adapt to changing conditions.

«For policymakers and administrators, the task is to intensify dialogue with business.»

For companies, this means systematically integrating geopolitical risks into strategic planning, testing supply chains for robustness, and preparing courses of action for different future developments. Scenario analyses, sensitivity models, and forward-looking risk assessments now belong in the toolbox, along with closer exchange with politics and trade associations.

Targeted Expansion of Location Advantages

For policymakers and administrators, the task is to intensify dialogue with business while also deliberately strengthening Switzerland’s location advantages, for example through lean regulation, economic freedom, and the protection of intellectual property. Ensuring a secure and competitive energy supply, along with progress in digitalization and accelerated approval processes, is particularly crucial to prevent Switzerland from falling behind in global competition.

«Tariffs are also a test of the strategic resilience of both companies and government.»

Switzerland is a small but highly interconnected country. Precisely for this reason, it must maintain its openness and deal wisely with external pressure. Tariffs are not only an economic burden but also a test of the strategic resilience of both companies and government.

It must also be recognized that the challenges do not come only from outside. Domestically too, a greater understanding of economic policy is needed among the wider public. Without this foundation, key initiatives to strengthen Switzerland as a business location cannot be implemented effectively, either politically or socially. Politics and business must work together to convincingly communicate the connection between economic strength and societal prosperity.

For location policy to be effective, it must be not only internationally compatible but also domestically supported by a majority. Only through strategic stability and prudence can Switzerland’s attractiveness as a business location be preserved, even in geopolitically challenging times.

Daniel Gentsch joined EY’s tax advisory practice in 1998 and became a partner in Zurich in 2009. From 2016 to 2022, he headed the Tax & Legal department at EY Switzerland and was a member of the Executive Board. Since April 1, 2025, he has served as Chairman of the Board of Directors of Ernst & Young AG in Switzerland. He has more than 25 years of experience advising companies on complex transactions.

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