Trump Trade War: Swiss Tariffs Spark Market Volatility, Gold Gains on Risk-Off Mood

Trump’s 39% Tariff on Switzerland Shakes Trade and Pharma Stocks

The Trump trade war escalated with an unexpected move last month, as Washington imposed a 39% tariff on Swiss imports. Switzerland faces one of the highest tariff rates among U.S. allies.

Novartis A (NVS) is one of the largest pharmaceutical companies in Switzerland. It has stockpiled drugs in the U.S. to reduce the impact of tariffs imposed by President Trump. Although pharmaceuticals are currently exempt from the 39% tariffs, a Section 232 investigation could lead to import duties on the sector. Novartis is preparing for any possible outcome of the trade investigation, but the CEO is uncertain about when the results will be announced.

From a market perspective, the technical outlook for Novartis stock remains strongly bullish. The stock continues to move higher on the long-term charts. However, the price shows strong volatility as it trades within an ascending broadening wedge pattern near record levels. The key levels for this volatility are the $103 and $145 regions. As long as Novartis holds above the $103 level, the stock is likely to continue rising toward the $145–$150 region over the next few months.

Meanwhile, other Swiss exports to the U.S. dropped by over 22%, marking their weakest performance since 2020. Moreover, luxury goods, including cheese, chocolate, and watches, saw sharp declines as customs began applying unexpected import taxes.

Switzerland’s Trade Concessions Fail to Sway Trump on Tariff Policy

Switzerland responded with a mix of diplomacy and trade incentives. Officials offered to purchase more U.S. weapons, liquefied natural gas (NG), and enriched uranium. They also pledged new investments in American industries. However, the talks remain fragile. Economy Minister Guy Parmelin led negotiations in Washington, but hopes for a breakthrough remain slim.

President Trump rejected Swiss President Karin Keller-Sutter’s request to reduce tariffs. After their phone call failed, she went to Washington but came back with no results. By mid‑2025, Switzerland had a trade surplus with the U.S. heavily influenced by its gold exports, prompting scrutiny from both Swiss economists and U.S. trade officials.

Gold Price Breakout Signals Safe-Haven Strength Amid Swiss Tariffs

While trade headlines rattled Swiss markets, gold emerged as a key hedge. Investors sought safety amid tariff shocks and global diplomatic tensions. From a technical perspective, gold breaks from a bullish consolidation zone. The chart below shows a strong breakout from the ascending channel at $3,500, pointing toward the $4,000 level. The increase in geopolitical risks and the dovish Federal Reserve continue to support precious metals. The ongoing trade war further strengthens gold’s appeal as a safe-haven asset.

The chart below shows that the consolidation between April and August 2025 mirrors a similar pattern from April to August 2024, which led to a surge of around $900. Therefore, the recent breakout at $3,500 in April 2025 has the potential to trigger a similar move in 2025. This move may take gold prices above $4,000.

USD/CHF Technical Analysis: Bearish Trend Deepens as Trade War Hits Franc

The technical outlook for USD/CHF remains strongly bearish, as shown on the weekly chart below. The pair recently reached long-term support at 0.7830, marked by the red-dotted trendline. After touching this level in September 2025, the pair rebounded sharply, leaving a long wick on the weekly candle. It now consolidates near the edge of the triangle pattern.

Despite the rebound, the pair faces strong resistance ahead. A break above 0.8000 could push the pair toward 0.8150 and 0.8400. However, the broader trend remains firmly bearish, suggesting continued downside momentum. A break below the 0.7830 level will trigger a substantial drop in the pair.