Small country: Big tariffs

Summary

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Business Daily: "Small country: Big tariffs"

Podcast: Business Daily
Host: Imogen Foulkes, BBC World Service
Date: October 8, 2025

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Episode Overview

This episode explores the economic shockwaves sent through Switzerland after the US, under President Trump, imposed a massive 39% trade tariff on Swiss goods—making Switzerland the most taxed developed economy by the US. Through on-the-ground reporting, expert commentary, and candid interviews with Swiss industry leaders, the program examines why these tariffs were imposed, who they hurt, and how both Swiss and American economies stand to lose. The host, Imogen Foulkes, delves especially into Switzerland’s critical medtech sector, the intricate roots of its manufacturing success, and how this new reality is forcing a small, export-driven nation to rapidly shift its global strategy.

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Key Discussion Points & Insights

1. The Tariff Bombshell

• [01:09–01:54] On Swiss National Day, while families celebrated, news broke that the US would hike tariffs on Swiss goods to 39%.

• Immediate Reactions:

  • “I was actually on a plane to the US when I first read about it and I simply could not believe what I was seeing.” – Adrian Hun, [01:54]
  • “39% tariffs. This is unjustified. You can't explain why it is so high.” – Jan Atislander, [02:16]

• Trade imbalance cited: President Trump reportedly found Switzerland’s $41 billion trade surplus with the US “intolerable” and pressed for even higher tariffs when initial negotiations failed.

  • “Instead of the original threat of 31% tariffs… he raised them to 39%.” – Imogen, [03:08]

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2. Economic Impact on Switzerland and the US

• [03:38–05:10] Switzerland is a top-ranked competitive economy; 17% of its exports go to the US.

  • “We are the biggest foreign investor in the United States. We employ hundred thousands of U.S. citizens and we pay the best salaries.” – Jan Atislander, [04:21]

• Tariffs are ‘unjustifiable’:

  • “We are not dumpers. We do not manipulate our currency… We have no export subsidies.” – Jan Atislander, [04:56]

• Paradox: The controversial trade surplus is mainly due to gold exports, which are exempt from the tariffs—while pharmaceuticals face even bigger threats.

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3. Swiss Medtech: Precision at Risk

• [05:52–08:34] Spotlight on Switzerland’s medical technology (medtech) sector, the third largest contributor to its trade surplus—beyond even cheese and chocolate.

  • “First of all, is pharma. Second… watches. But then… comes MedTech.” – Adrian Hun, [05:52]

• High-stakes manufacturing:

  • Swiss medtech exports include life-saving and life-enhancing devices “from knee implants, pacemakers, dental implants, surgical instruments… and much more.” – Adrian Hun, [06:24]
  • Many of these devices stem from the country’s legacy of precision watchmaking, combined with top-tier medical training.

• Ecosystem, not assembly line:

  • “Here we do everything ourselves almost. We make high precision systems, medical devices... very specific gears for drug delivery systems.” – Gilles Robert, [07:24]
  • “This is the engine of the currently only medically registered artificial hearts in the world… it will pulse in both sides… allow people… to keep on living.” – Gilles Robert, [08:08]

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4. Why Moving Manufacturing Isn’t Simple

• [10:26–11:45] Trump’s promise (“make these things in the US”) meets a harsh technical reality.

  • Medtech isn’t car-making: “Every part is matched to the other. If you don't have a manufacturing environment where you control every element, it won’t work.” – Gilles Robert, [11:03]

• Swiss vocational training critical:

  • “The apprenticeship… where you put teenagers in front of machines… then over the years get them to really understand… what it means to mill or to turn or to assemble. I think those types of skills would be extremely hard to find in the US.” – Gilles Robert, [12:40]

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5. The Painful Ripple Effects of Tariffs

• [13:16–15:39] With little wiggle room, Swiss exporters can’t absorb the extra cost: “The margins are already as low as they can be.” – Gilles Robert, [13:26]

• US hospitals and patients may ultimately pay, or lose access to critical devices:

  • “Some decisions might be made that certain products are… too expensive and will hence be discontinued… American patients might lose access.” – Gilles Robert, [13:51]

• “Medical device will get more expensive for US patients… This means taxpayers bear the burdens.” – Adrian Hun, [14:52]

• The sector association calls this a “horror scenario”.

• Rapid fallout: Swiss exports to the US “have already dropped off dramatically.” – Imogen, [15:39]

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6. Searching for Solutions: Diversification and Resilience

• [16:11–17:09] Switzerland leans into diversification—recent free trade agreements with India, China, and Mercosur.
  • “This strategy as an export nation has no alternative... Resilience is one one of the things you really have in your DNA.” – Jan Atislander, [16:11]

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7. Who Really Loses? Both Sides.

• “We are a fair partner for the United States. There are not that many products where you have a NET margin of 39%. I'm sorry. And there are companies that have very good products. They communicated. We just stopped delivering. Sorry, guys.” – Jan Atislander, [17:13]

• US rhetoric: “Tariffs are about making America rich again and making America great again. And it's happening and it will happen rather quickly.” – Ryan, [17:32]

• But shortages will hit American hospitals and patients first—and for Switzerland, finding new markets is a matter of survival, but the “hurt remains.”

  • “The Swiss loved doing business there. Their economy has always been less regulated than the EU’s. Closer… to the US model. Now both Adrian Hunter and Gilles Robert have had to abandon that notion.” – Imogen, [17:39]

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Notable Quotes & Memorable Moments

• “I simply could not believe what I was seeing.” – Adrian Hun ([01:54])
• “39% tariffs. This is unjustified.” – Jan Atislander ([02:16])
• “We are like a best case example how you can have a very good partner.” – Jan Atislander ([04:21])
• “It’s not only what we have in our factory that's important. The people, the skills that are built... these are all contributing to reaching those almost impossible things. And you cannot just move that around.” – Gilles Robert ([11:45])
• “I can say quietly, they had the best price before the new tariffs came into effect... the margins are already as low as they can be.” – Gilles Robert ([13:26])
• “Medical device will get more expensive for US patients... taxpayers bear the burdens.” – Adrian Hun ([14:52])
• “Resilience is one of the things you really have in your DNA. Otherwise you will not get very far.” – Jan Atislander ([16:11])
• “There are companies that have very good products. They communicated. We just stopped delivering. Sorry, guys.” – Jan Atislander ([17:13])
• “Even though I’m a bit sad of this situation, will overcome and yeah, we’ll find solutions and I’m sure in the end reason will prevail.” – Gilles Robert ([18:51])

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Timestamps for Important Segments

| Timestamp | Segment / Topic | |-----------|----------------| | 01:09 | Introduction: Tariff shock on Swiss National Day | | 01:54 | Business leaders react: disbelief, anger | | 03:08 | Trade deficit rationale and failed negotiations | | 04:21 | Swiss role in the US economy (investment, jobs) | | 05:52 | Medtech: third largest Swiss export surplus | | 07:24 | The medtech ecosystem and roots in watchmaking | | 08:08 | Swiss innovation: the artificial heart | | 11:03 | Why precision manufacturing can’t simply be relocated | | 12:40 | Swiss vocational education: the skills gap | | 13:26 | Can companies absorb the tariffs? Implications for buyers | | 14:52 | Impact on US patients, hospitals, and taxpayers | | 16:11 | Switzerland’s strategy: diversification for resilience | | 17:13 | Who loses? Both the US and Switzerland | | 18:25 | The personal and economic hurt; hope for future solutions |

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Tone & Final Reflections

Consistent with the BBC’s measured yet urgent style, the episode voices real concern from industry insiders, highlights detailed technical realities, and portrays both economic pain and Swiss resilience. While the tone is at times incredulous—“You can’t explain why it is so high”—it is also pragmatic, focused on seeking new opportunities and preserving optimism about future US-Swiss relations.

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For further episodes, search “Business Daily” on your preferred podcast platform.

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Transcript

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[Gilles Robert]

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[Jan Atislander]

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[Swiss Official]

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[Imogen]

Hello and welcome to Business Daily from the BBC World Service. I'm Imogen. Folks in today's program we look at a small but very successful country now coping with some of President Trump's highest tariffs. 1 August 2025. Across Switzerland, families were celebrating Swiss National Day, getting together for brunch in the mountains, barbecuing the traditional Saulite sausages. And then shattering news. The President is escalating his global trade tariff war. Sweden, Switzerland with a 39% tariff.

[Adrian Hun]

I was actually on a plane to the US when I first read about it and I simply could not believe what I was seeing.

[Gilles Robert]

For me, who has been dedicated his whole career the last 30 years to promoting this, the Swiss excellence into building things that not many other can. I was really, I was stunned.

[Jan Atislander]

39% tariffs. This is unjustified. You can't explain why it is so high.

[Imogen]

Switzerland is now the most heavily taxed developed economy in the US trade reset. A 39% tariff. The shock among Swiss business leaders was profound, not least because back in May, Switzerland's president Karin Keller Souter had appeared very hopeful of a deal.

[Swiss Official]

The US side was quite clear about the fact that they wanted to accelerate the process with Switzerland, that we would really be in a group of countries that are now treated swiftly. This is also in the interest of both countries. We are important commercial partners. We're a very important direct investor in the US when it comes down to manufacturing. We are number four, R&D number one.

[Imogen]

But the US President wouldn't budge. For Donald Trump, the fact that tiny Switzerland, with a population of just 9 million people, sells more to the US than it buys is intolerable. Instead of the original threat of 31% tariffs on Swiss goods, he raised them to 39%.

[Ryan]

Look, I did something with Switzerland the other day and they paid essentially no tariffs. And I said, we have a $41.

[Gilles Robert]

Billion deficit with you.

[Imogen]

Two months on. Efforts to negotiate with Washington have proved fruitless. The Swiss President is expected to leave Washington without a deal. The Swiss economy, regularly ranked as the most competitive in the world, is slowing down. Job losses are predicted in key industries. 17% of Swiss exports are sold to the US a significant percentage that Switzerland can't afford to lose overnight. Jan Atislander, director of International trade for the Swiss Business Federation Economy Suisse, says the US gains more from Switzerland than quality cheese and chocolate. And he's still at a loss to understand President Trump's strategy in the area.

[Jan Atislander]

Of research and development. We are the biggest foreign investor in the United States. We employ hundred thousands of U.S. citizens in the United States and we pay the best salaries. So strategically, from a fact based perspective, we have excellent economic relations. We are like a best case example how you can have a very good partner.

[Imogen]

What do you think Switzerland can do? I mean, President Trump, he sees this, the trade imbalance. Basically, Switzerland sells more to America than it buys.

[Jan Atislander]

We are not dumpers. We do not manipulate our currency. And this has repeatedly been confirmed by United States evaluation assessments. And we have no export subsidies. So here, that's why I said at the beginning, this is unjustifiable.

[Imogen]

President Trump, sweeping global tariffs for more than 90 countries have come in into effect.

[Swiss Official]

Minutes before he took to social media.

[Imogen]

Saying billions of dollars in tariffs are now flowing into the United States of America. Unjustifiable or not, the tariffs are in force. What is especially infuriating for Swiss producers is that the trade surplus Switzerland has with the US is caused primarily by gold exports, which are exempt, and pharmaceuticals, which are subject to a separate threat of 100% tariffs. So which Swiss products are most affected by the 39%? Not necessarily the ones you might immediately expect.

[Adrian Hun]

Switzerland is actually a medtech Hub. There are 72,000 people working in this sector. And if you look at the trade surplus, medtech is ranked third for Switzerland. First of all, is pharma. Second, not surprisingly, is watches. But then doesn't come chocolate and cheese and all of that, then actually comes.

[Imogen]

MedTech Adrian Hun is managing director of Swiss MedTech Tech, the trade body representing Switzerland's medical technology industry. It makes things the United States very much wants.

[Adrian Hun]

We are doing a lot of life saving and life improving devices from knee implants, pacemakers, dental implants, surgical instruments, cardiovascular stents, diagnostic testics and much more. And the reason for that is a little bit historic, but I'm a big historian. It's actually precision mechanics is in the roots for watchmaking here in Switzerland that what everybody combines with Switzerland, Swiss watches, etc. And then you have this great combination of precision mechanics and very good medical faculties at the universities. And this developed really this medtech ecosystem here in Switzerland.

[Imogen]

To get a closer look at Switzerland's medical technology industry, I've come to biel. It's historically the center of of Swiss watchmaking. And some of the big names are still here, Omega and Swatch. But those precision skills have now been transferred to a different product.

[Gilles Robert]

Here we do everything ourselves almost. We make high precision systems, medical devices, type subsystems, positioning systems, part of implants, very specific gears for drug delivery systems. And that's what we sell to the whole world.

[Imogen]

Jules Robert is chief executive officer of MPS Microprecision Systems. From aortic valve replacements to the tiniest of surgical drills used in hip or knee replacements. It produces things a wealthy country with an aging and increasingly overweight population like the US really needs. There's one product Gilles is especially proud of.

[Gilles Robert]

This is the engine of the currently only medically registered artificial hearts in the world. It's a pump that will pulse in both sides to create a beating in both chambers and allow people currently waiting for a transplantation and eventually allow people with terminal heart deficiencies to keep on living.

[Imogen]

So this could actually replace the traditional heart transplant which has to come obviously from another human being, a human being who's died.

[Gilles Robert]

This could complement because there are not so many heart transplants available and past a certain age or certain conditions, you're not allowed to have a transplant anymore. So this is a device that is delivering or going to deliver a solution to those people that even cannot hope to access to a transplant. The device is designed for more than 15 years of operation and yeah, we are slowly ramping up the production for this product.

[Imogen]

This is Business Daily from the BBC World Service.

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[Imogen]

I'm Imogen folks. And today we're looking at US Trade tariffs on Switzerland. One of the things we know Donald Trump has been promised is to make things like the precision devices made here in the United States. But such is the required accuracy of MPS devices that even the tools used to make them are custom built right here in Switzerland. So I had another question for Gilles. Robert. This is not like a car where you can do the brakes in one country and the windscreen wipers in another and the door handles in another.

[Gilles Robert]

No, it's not. Every part is kind of matched to the other. So if you don't have a manufacturing environment where you control every element, it won't work. And that's what we provide as a value to our customers that we say we are able to make it work, even though it's extremely complicated and it would be extremely challenging, if not impossible, to separate the components from the actual product assembly.

[Imogen]

I mean, you are testing and measuring things to micro millimeters, and the machines you have to do that are also made in this region. Is that right?

[Gilles Robert]

It's true. This is a whole ecosystem. It's not only what we have in our factory that's important. The people, the skills that are built, the machines and the tooling that are used. But it's also a lot of the suppliers that understand what we need to achieve these precisions that are extremely important. Measuring equipment, milling tools, cutting liquids, these are all contributing to reaching those almost impossible things. And you cannot just move that around. It's a very integrated way of working. And that's what we call an ecosystem that we have here in Switzerland.

[Imogen]

Say you could get all that equipment into North Carolina or Alabama or somewhere and start employing US Workers to make your products. There would you be able to get the kind of staff that you need.

[Gilles Robert]

We know it's a challenge. Education, the Swiss educational system is very important. The apprenticeship, as we call it, where you put teenagers in front of machines, learn them first the basics, but then over the years get them to really understand very deeply what it means to mill or to turn or to assemble. I think those types of skills would be extremely hard to find in the US Nothing is impossible with enough money and patience and grit. But it's a real challenge.

[Imogen]

Well, you're going to need money and patience and grit anyway. With 39% tariffs, can you absorb them? How will you do it? Will it be passed straight to the buyer?

[Gilles Robert]

I can say quietly, they had the best price before the new tariffs came into effect. So that means we don't have this leeway of giving a discount to our customers because they are already, the margins are already as low as they can be.

[Imogen]

So hospitals, very modern hospitals in the United States, buy your stuff. What are they going to do?

[Gilles Robert]

It will depend obviously on the decisions of our customers in how they're going to transfer that extra cost to their customers, the hospitals. But what I believe is going to be more likely is that some decisions might be made that certain products are, are becoming too expensive and will hence be discontinued. And hence possibly the American patients might lose access to some of the devices and the systems that help them recover.

[Ryan]

What people don't understand is, and this is a lot, the country eats the tariff. The company eats the tariff.

[Imogen]

President Trump has promised US Citizens that the countries he is punishing with tariffs will swallow the cost of them. In fact, many companies like MPS say they will have to pass the costs on to US customers. Adrian Hun of Swiss Medtech agrees with Gilles Robert that this will be bad news for US Patients and US taxpayers.

[Adrian Hun]

Medical device will get more expensive for US patients. There's multiple reasons for that. You know, some of them you cannot replace. Some of them you still have, you know, like you still have to import from foreign countries, including Switzerland, to a large part. And I think this will affect not only patients, but also taxpayers. You know, cost for hospitals and healthcare systems in US in many cases these are funded by public reimbursement programs. This means taxpayers bear the burdens. So it gets more costly for actually the patient than the taxpayers in the US to get medical devices. Switzerland's Tech Sector association has described the levies as a horror scenario that threatens jobs across the country.

[Gilles Robert]

Country's export driven economy so pain literally.

[Imogen]

For US Patients because of these tariffs, but also Pain for Switzerland. Swiss negotiators have ruled out retaliatory measures, concluding that Switzerland's David is just too small to take on America's Goliath. Swiss exports to the US have already dropped off dramatically. The trade deficit Donald Trump complained about is rapidly vanishing. And Swiss companies are scrambling to find new markets here. Jan Atislander of Economy Suisse thinks the future may look brighter.

[Jan Atislander]

The strategy of diversification plays out now. We have just concluded a free trade agreement with India, the fastest growing economy on this planet. 1.4 billion potential consumers. We are revising a free trade agreement with China. Others don't even have anything to revise. They have no free trade agreement with China. So we are broadly diversified and 50% of our total exports go to the European Union. We will continue this. We have just concluded negotiations with Merkasur, also a very dynamic market with roughly 300 million inhabitants. So this strategy as an export nation has no alternative. We have to diversify and being an export nation, a successful explanation. Resilience is one one of the things you really have in your DNA. Otherwise you will not get very far.

[Imogen]

So who's going to be the loser here? Switzerland or the United States? Or both?

[Jan Atislander]

Definitely both. We are a fair partner for the United States. There are not that many products where you have a NET margin of 39%. I'm sorry. And there are companies that have very good products. They communicated. We just stopped delivering. Sorry, guys.

[Ryan]

Tariffs are about making America rich again and making America great again. And it's happening and it will happen rather quickly.

[Imogen]

So US consumers could soon be doing without not just luxuries like Swiss cheese or chocolate, but life enhancing medical technologies, from the world's best artificial knees to dental implants. But although Switzerland may find lucrative markets elsewhere, the US market won't be so easy to replace. Meanwhile, the feeling of hurt remains. America wasn't just an important market. The Swiss loved doing business there. Their economy has always been less regulated than the European Union's. Closer, the Swiss fondly thought to the US model. Now both Adrian Hunter and Gilles Robert have had to abandon that notion for now at least.

[Adrian Hun]

I used to live six years in the U.S. so you know, I was very close. I have a lot of friends there. And also for business reasons. I traveled, you know, numerous times to the US and also spent usually my summer vacation there. So, like, let's put it that way, you know, like it didn't change the view on America, but they changed the view. You know, how the current administration in the US is actually acting globally and treating allies.

[Gilles Robert]

I studied a year in the in the us. It had an impact on me and in my way of looking at the world and how you can take risks, be an entrepreneur and be positive about the future. And I think this is still a very deep influence on the way I manage even a Swiss company today. So even though I'm a bit sad of this situation, will overcome and yeah, we'll find solutions and I'm sure in the end reason will prevail.

[Imogen]

And that hopeful Swiss plea for reason and good relations brings us to the end of today's program from me, Imogen folks. For more episodes, just search for Business Daily wherever you get your BBC podcasts.

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