Switzerland Today

Dear Swiss Abroad,

trade measures taken by the Trump administration continue and this time the United States has placed Switzerland on a list of countries with unfair practices. The wording may seem harsh, but the consequences are not yet entirely clear.

Keep reading to find out more.

Keystone / Susanne Goldschmid

The United States has placed Switzerland on a list of countries with ‘unfair trading practices’, the head of the State Secretariat for Economic Affairs (SECO), Helene Budliger Artieda, told the CH Media newspapers on Sunday.

Switzerland has a trade surplus with the United States. This means that it exports more products to the US than it imports. This is why it is now on a US list of countries with unfair trading practices.

 “But we certainly can’t be accused of being unfair. Switzerland has unilaterally abolished its industrial tariffs, we have no pharmaceutical tariffs. US companies can export their products to Switzerland duty-free,” said Budliger Artieda. However, it is too early to say whether President Trump will be receptive to these arguments.

Switzerland is not in a position to engage in a trade war with the United States. The EU, on the other hand, does not see it that way and intends to retaliate if the Trump administration imposes punitive customs duties.

“And here we have already had bad experiences during Donald Trump’s first term in office. The EU treated us like a third country and we were affected by the countermeasures,” recalls the SECO director. Switzerland is holding talks with the EU on this issue.

• The article by RTSExternal link (in French)

Keystone

Faced with an increasingly unstable geopolitical situation, Europe is rearming. But because of Swiss neutrality, the nation’s arms industry is losing out .

In Switzerland, the arms industry is subject to the War Materiels Act, which prohibits the supply of weapons to countries at war. At a time when the European Commission is planning to invest €800 billion to rearm Europe, the current regulations are having a negative impact on the Swiss arms industry. After the Federal Council refused to allow Germany to export Swiss equipment to Ukraine, several countries decided not to order Swiss equipment.

Switzerland is home to a large number of companies with links to the armaments sector. According to BAK Basel, the armaments industry generates around 14,000 jobs in Switzerland, generating added value of CHF2.3 billion. However, if indirect employment is taken into account, this figure rises to CHF32 billion. And according to the State Secretariat for Economic Affairs (SECO), Swiss exports of war materiel are falling sharply.

Clearly aware of the sector’s concerns, the defence ministry has stated that “Switzerland (and its armaments industry) must once again be seen as a reliable partner in Europe. To achieve this, we need framework conditions and legal certainty for arms exports”.

The Federal Council now wants to revise the law on war materiel. This would allow arms to be exported to countries in conflict in certain cases. Parliament will shortly vote on this controversial amendment to the law.

• Article on the topic on RTSExternal link (in French)
• Swissinfo analysis on Seven weaknesses in ‘Fortress Switzerland’

Keystone / Salvatore Di Nolfi

The government wants to tax pension withdrawals more heavily. As a result, it may become increasingly attractive financially to retire abroad.

In Switzerland, the government’s plan to increase taxation on pension capital could make it even more attractive for some Swiss to leave the country. Specialists agree that moving abroad before withdrawing pension assets can result in significant savings.

The tax on pension capital withdrawals only applies if a person is resident in Switzerland. For all others, withholding tax applies. And the rates are generally much lower. However, rates can vary widely from canton to canton.

What’s more, double taxation agreements sometimes allow you to reclaim withholding tax already paid, provided you are duly registered in the new country. Germany, for example, is an attractive country for retirees, as is Greece. Portugal and Italy, on the other hand, have significantly reduced their tax advantages.

However, Philipp Zünd, tax expert and partner at the consultancy firm KPMG, warns against bogus emigration: “Anyone leaving Switzerland must take the plunge carefully. This means that, at most, you can return to your own country for a holiday”. The specialist warns that the tax authorities would be quick to spot fraud thanks to the traces left by financial data.

• The article in the NZZ am SonntagExternal link (behind a paywall)
• Swissinfo’s analysis of taxes on pension payments
• Do Swiss pensioners living abroad ‘milk’ the system?

Keystone / Peter Schneider

The Swiss People’s Party was the big winner in Sunday’s cantonal elections in Solothurn displacing the Radicals’ historic stronghold in the canton’s parliament.

Of the 100 seats in the Solothurn cantonal parliament, the People’s Party now holds 25, an increase of four seats. The Radicals and the Liberal Greens each lost two seats and the Green lost one, while the Social Democrats gained an additional seat.

“I’m relieved that we managed to make progress. We were able to mobilise people, despite an apparently low turnout,” enthused Rémy Wyssmann, president of the Solothurn branch of the People’s Party.

The big loser in these elections was the Radical Liberal Party, which has always been the dominant political force in Solothurn’s parliament. However, party president Stefan Nünlist does not take a negative view of the result. “We’re getting closer in the national results, where the People’s Party has long been the strongest bourgeois force. In the end, the Liberal camp has even strengthened,” he said after the results.

As for the elections for the Solothurn state council, no candidate achieved an absolute majority in the first round. The People’s Party is now in a strong position to win its first seat in government.

• Analysis of the results by SRFExternal link (in German)
• Overview of the results by RTSExternal link (in French)

Keystone / Georgios Kefalas

Picture of the day

The Basel carnival kicked off on Monday with the Morgenstreich parade at 4am. The streets and squares were transformed into a sea of lanterns, accompanied by fifes and drums.

With the command “Morgestraich: forward march”, the city’s biggest festival got underway. With its motto ‘Syg wie de wottsch’ (be as you will), the 2025 event puts the right to self-determination into a carnival context.

Jean Tinguely and the Eurovision Song Contest are also popular themes this year.