Exports • Imports • MNCs • Trade Patterns
Top Exports & Industries
~50%+ Pharmaceuticals & Biotech
Novartis (Basel) • Roche (Basel) • Lonza (Basel, CDMO) • Sandoz (Basel, generics) • Galderma (Lausanne) • Idorsia (Allschwil) • Price-inelastic global demand — exports grew despite CHF appreciation
~10% Watches & Luxury
Swatch Group (Biel) — owns Omega, Tissot, Longines, Breguet • Rolex (Geneva, private) • Patek Philippe (Geneva) • Richemont (Geneva) — owns Cartier, IWC, Vacheron Constantin • ~CHF 22–24bn/yr (2023)
~10% Machinery & Industrial
ABB Ltd (Zurich) — robots, power grids, automation • Schindler (Ebikon) — world’s #2 elevator maker • Georg Fischer (Schaffhausen) • Sulzer (Winterthur)
Specialty Chemicals & Fragrances
Givaudan (Geneva) — world’s largest fragrance & flavour co. • Sika (Baar) — world leader in construction chemicals • Clariant (Muttenz) • DSM-Firmenich • EMS-Chemie
Gold Refining (unique)
Valcambi (Lugano) — world’s largest gold refinery • PAMP • Argor-Heraeus • ~70% of world’s newly mined gold refined in Swiss Ticino • Can be #1 goods export by value in some years
Commodities Trading (HQs in Switzerland)
Glencore (Baar/Zug) — world’s largest commodity trader • Vitol (Geneva) — world’s largest oil trader • Trafigura (Geneva) • Gunvor (Geneva) • Low-tax cantons (Zug, Vaud) attract trading HQs
Food & Beverages
Nestlé (Vevey) — world’s largest food company • Nescafé, KitKat, Milo, Purina • Lindt & Sprüngli (Kilchberg) • Barry Callebaut (Zurich) — world’s largest B2B chocolate maker
Top Imports
Largest Gold & Precious Metals (Raw)
Imported as raw/unrefined gold • Refined in Ticino refineries • Re-exported as refined gold • Makes Switzerland a net gold trader
Chemical & Pharma Inputs
Active pharmaceutical ingredients (APIs) • Chemical precursors • Mainly from EU (Germany, France, Italy)
Machinery & Electronics
Industrial components, semiconductors, electronic parts • EU & Asia
Vehicles
Cars (Germany dominates: BMW, Mercedes, VW), trucks • Switzerland does not produce vehicles domestically
Agricultural Products
Food & drink (despite 70%+ agricultural subsidies, still imports food) • Coffee, tropical goods, wine from EU/world
Energy (Oil & Gas)
No domestic fossil fuel production • Relies on imports • Transitioning to renewables (hydro already ~55% of electricity)
Import Sources (2024)
EU ~65% • US ~8% • China ~6% • UK ~4% • Highly diversified
Key MNCs Headquartered in Switzerland
Financial Services
UBS Group (Zurich) — largest Swiss bank, global wealth manager • Julius Bär (Zurich) — private banking • Pictet (Geneva) — private wealth • Lombard Odier (Geneva) • Zurich Insurance Group • Swiss Re (world’s 2nd largest reinsurer) • Swiss Life
Tech & Industrial
ABB (automation & electrification) • Temenos (Geneva) — banking software • u-blox (Thalwil) — semiconductors • Logitech (Lausanne) — computer peripherals • Sonova (Hörengen) — hearing aids
Tax-Driven HQs (Zug canton ~12% corp. tax)
Glencore (commodities) • Sika (construction chemicals) • Partners Group (private equity) • Alcon (eye care) • Stadler Rail (trains) • Many multinationals use Swiss HQs for EMEA operations
Geneva International HQs
WTO • WHO • UNHCR • ICRC • ILO • WIPO • UNCTAD • 250+ international organisations • Drives demand for financial & legal services
Trade Patterns 2005–2024
2005–2010: diversified
Pharma ~40%, machinery ~15%, watches ~10% • Financial services growing as % of export earnings
2011–2015: CHF shock era
SNB peg at 1.20/EUR (2011) held then abandoned (Jan 2015) • CHF surged ~20% • Exporters hit hard; watch sector especially affected • Pharma more resilient (inelastic demand)
2015–2020: pharma dominance
Pharma grew to >50% of goods exports • Inelastic demand absorbed CHF strength • Financial services declining as banking secrecy eroded (FATCA, OECD CRS)
US as #1 destination (2024)
CHF 54.7bn to US (2024) despite 39% Trump tariff • Proves price-inelastic pharma demand • Marshall-Lerner condition NOT met for pharma
China growth
~3% (2010) → top 5 destination (2024) • Pharma + luxury watches + machinery • FTA with China signed 2014
2022: Russia sanctions
Switzerland adopted EU sanctions • Russian assets frozen • Some Geneva commodity traders moved operations • Credit Suisse Russian client exposure caused reputational damage
Overall CHF trend
~25–30% real appreciation vs EUR (2005–2024) • Yet exports GREW — structural shift to inelastic-demand products is the key explanation
Core Economic Indicators
GDP (total)~$937 billion (2024)
GDP per capita~$101,500 (3rd highest globally)
GDP growth rate~1.8% (2024)
GNI per capita (Atlas)~$95,160
GNI per capita (PPP)~$79,590
HDI0.962 — top 5 globally
Gini (income)~33 (relatively equal)
Gini (wealth)~74 (very high — financial sector concentration)
Inflation~1.1% (2024)
Population~8.9 million (25% foreign nationals)
Labour, Social & Human Capital
Unemployment~4.1% (2024)
Social expenditure~24% of GDP (comprehensive welfare state)
Life expectancy~84 years (among world's highest)
Doctors per 1,000~4.3 (among world's highest)
Agriculture workforce~1.3% of employment (post-Lewis)
R&D spending~3.2% of GDP
Global Innovation Index#1 every year since 2015
UniversitiesETH Zurich & EPFL — global top-10 engineering
Foreign nationals~25% of population — high in-migration of skilled workers
Trade & External Sector
Trade balance+CHF 54.3bn surplus (2024)
Current account surplus~10% of GDP (persistent structural surplus)
US exports (2024)CHF 54.7bn — despite 39% Trump tariff
Inelastic demand for Swiss pharmaceuticals means tariffs barely reduced exports — key PED evidence
Biggest export sectorPharma — Novartis & Roche = ~50% of goods exports
Other major exportsPrecision instruments, luxury watches, machinery, financial services
Main export destinationsEU ~50%, US ~15%, China ~5%
SNB FX reserves~$780bn+ (to prevent CHF over-appreciation)
Agriculture70%+ subsidised (OECD) despite comparative disadvantage
Tax System — Federal + Cantonal + Municipal
Switzerland has 3 layers of tax: Federal + Cantonal + Municipal. Cantons compete on rates, attracting multinationals.
VAT8.1% standard — one of Europe's lowest
Wealth taxYes — unique — cantonal, ~0.1–0.7% of net assets per year
INCOME TAX (Federal + Cantonal + Municipal combined)
Federal rate (max)11.5% (on income above ~CHF 769,000)
Zug (LOWEST total)~22% total for top earner
Nidwalden~22.5% total
Zurich~40% total
Bern~42% total
Geneva (HIGHEST total)~45% total for top earner
CORPORATE TAX (Federal + Cantonal combined effective rate)
Federal corporate rate8.5% effective (federal only)
Zug (LOWEST total)~12% — attracts multinationals incl. Glencore, Johnson & Johnson
Nidwalden~12.7% total
Geneva~14% total
Zurich~19% total
Bern (highest major)~21% total
OECD Pillar 2 global minimum 15% corporate tax adopted — cantonal rates now converging upward
Fiscal Policy & Public Finance
Government debt/GDP~40% (AAA rated by all 3 agencies)
Debt brakeConstitutional since 2003 — structural balance required each cycle
Debt brake prevents deficit spending beyond cycle — limits fiscal expansion but builds credibility. IMF recommends as a global model.
Credit Suisse crisisCollapsed 2023 — emergency state-backed UBS merger (TBTF risk)
TBTF reformNew Too-Big-To-Fail banking rules announced 2024
SDC (aid)Swiss Development Cooperation active in 70+ developing countries
Trade Patterns & Changes (2005–2024)
2005–2010 export profilePharma ~40%, machinery ~15%, watches ~10%, chemicals ~10%, financial services growing
2024 pharma dominancePharma/chemicals now >50% of goods exports — Novartis & Roche alone ~CHF 70–80bn/yr
Watch exports~CHF 22–24bn (2023) — declining as % of total as pharma surged but still globally dominant
Gold refiningSwitzerland refines ~70% of world’s gold — can be top goods export by value in some years
Financial servicesDeclined as % of export earnings since 2008 — banking secrecy reforms reduced competitive advantage
US export growth~10% (2010) → ~15% (2024) of goods; record CHF 54.7bn despite 39% Trump tariff (2024)
China as destination~3% (2010) → one of top 5 destinations (2024) — pharma and luxury goods
Russia sanctions (2022)Switzerland adopted EU sanctions — trade flows with Russia redirected; some capital outflows
Services shiftWealth management, insurance, consulting growing; banking less dominant post-2008 and post-Credit Suisse
Key structural trendIncreasing concentration in high-value pharma — creates resilience (inelastic demand) but also concentration risk
CHF Exchange Rate History & Depreciation / Appreciation
Overall 2005–2024 trendCHF appreciated ~25–30% vs EUR in real terms — persistent long-run appreciation
CHF/EUR (2005)~1.55 (CHF relatively weak vs Euro)
2008 global crisisCHF surged as safe-haven currency — SNB began FX intervention to cap appreciation
Sep 2011: SNB peg setCHF/EUR floor set at 1.20 — SNB commits to unlimited intervention to defend it
2011–2015: peg periodSNB accumulated ~€450bn+ in FX reserves defending the 1.20 floor
Jan 15, 2015: peg abandoned“Frankenschock” — CHF/EUR went from 1.20 to 0.85 in minutes; CHF surged ~20%
The 2015 “Frankenschock” is a textbook exam case: exporters lost ~15–20% of revenue overnight; watchmakers especially hit; GDP briefly negative
Jan 2015 onwardsSNB deployed negative rates (−0.75%) to deter CHF demand — held until Sep 2022
CHF/EUR (2020)~1.06 — still much stronger than pre-2015 despite SNB intervention
2022: Ukraine war safe havenCHF surged again as investors fled to safety — SNB intervened heavily to cap rise
Sep 2022: SNB raised ratesEnded negative rates; SNB shifted to tightening cycle — first rate rise in 15 years
CHF/EUR (2024)~0.93–0.95 — CHF significantly stronger than both 2011 peg and 2005 levels
CHF/USD trend~1.05/USD (2010) → ~0.88/USD (2024) — ~16% CHF appreciation vs dollar over 14 years
Despite 25–30% real CHF appreciation since 2005, Swiss goods exports GREW — because pharma demand is price-inelastic. This demonstrates why non-price competitiveness matters more than exchange rate for Switzerland.
Marshall-Lerner implicationCHF appreciation did NOT worsen Swiss trade balance — PED of pharma exports is very low (inelastic); Marshall-Lerner condition not met for Swiss exports
Currency & Monetary Policy (SNB)
CurrencySwiss Franc (CHF) — managed float by SNB
CHF = safe havenAppreciates in every global crisis — major SNB challenge
SNB negative rates−0.75% (2015–2022) to deter CHF accumulation
SNB peg removalJan 2015 — CHF surged ~20% in minutes (textbook exam case)
SNB FX reserves~$780bn+ accumulated via FX market intervention
SNB accused by US Treasury of currency manipulation due to sustained FX purchases to weaken CHF
WTOFounding member (1995)
EU relationshipNOT EU member — 120+ bilateral agreements (unique model)
EFTAMember (with Norway, Iceland, Liechtenstein)
FTAs40+ countries including China (2014) and Japan
Key Macro Facts for Essays
These are the most essay-relevant facts — use these as evidence
Income vs wealth inequalityIncome Gini 33 (progressive tax) but wealth Gini 74 (financial sector)
Laffer curve in actionHigh earners relocate TO Switzerland for low cantonal rates
Inelastic pharma demandCHF 54.7bn US exports despite 39% tariff — price inelastic
Marshall-Lerner / J-curveJan 2015 CHF surge → textbook case of ER shock
Debt brake modelConstitutional — limits crowding out; IMF recommends globally
Lewis transition completeOnly 1.3% in agriculture — fully post-structural transformation
TNC systemic riskCredit Suisse 2023 — TBTF even with AAA-rated public finances
CA surplus + US label8–15% of GDP surplus → US Treasury “currency manipulator” accusation