[Forex] The plummet of the strongest coin, the Swiss Franc, and the behind-the-scenes of the 39% tariff | Hiroko Ohashi's Understandable! First Time in FX | Moneyクリ Media for investment information and money.

Strict High Tariffs Imposed on Switzerland

The Swiss franc, which has been considered the strongest currency until now, plummeted on August 1. This was due to U.S. President Trump raising the mutual tariff rate on Switzerland from the previously announced 31% in April to 39%. While the mutual tariff rate on Iceland, Norway, and Liechtenstein, which form the European Free Trade Association (EFTA) with Switzerland, remained at 15%, the harsh tariff rate imposed on Switzerland led to selling off the Swiss franc.

Background of the Swiss Franc Appreciation So Far

The background behind the Swiss franc being called the strongest until now is that the inflation rate (CPI) is around 0.2%, which is lower than that of major Western countries, contributing to the currency's purchasing power and high creditworthiness. Additionally, the fiscal balance for 2024 is expected to be a surplus of about 0.6% of GDP, and the continuation of this surplus trend in recent years can also be said to be a reason why Switzerland has been chosen as a safe asset.

The background of the high tariffs imposed by the United States is the rapid increase in Switzerland's trade surplus with the U.S. The trade surplus of Switzerland with the U.S. is estimated to be around 38.7 to 40 billion Swiss francs based on data from 2024 to 2025. This surplus amount ranks around 6th among countries worldwide, but in fact, it was ranked 18th as of 2024. It has jumped up in rank in the first half of 2025.

Background of the Surge in Trade Surplus with the United States

Why did Switzerland's trade surplus with the U.S. surge? The main reason is that gold exports to the U.S. have expanded to an unprecedented level. In the first quarter of 2025, Switzerland's gold exports to the U.S. exceeded $36 billion, accounting for more than two-thirds of the overall trade surplus with the U.S.

This is due to a rush among traders who are wary of the possibility that Trump tariffs could be imposed on gold and other precious metals, leading them to import gold into the United States before the tariffs take effect. In January 2025, gold exports from Switzerland to the United States reached a record high of 192.9 tons (about three times the amount in December 2024). The inauguration of President Trump and tariff policies accelerated this movement.

The Trump administration has taken issue with the U.S. trade surplus, which corresponds to the expansion of the U.S. deficit, and is imposing high tariffs of 39%. However, behind this massive deficit lies a caution regarding the Trump administration's tariff policy. In reality, as of now, no tariffs have been imposed on precious metals such as gold.

The Swiss government intends to continue negotiations.

The Swiss President visited the US in early August 2025 to negotiate a reduction of the 39% tariff, but no meeting with President Trump was realized, and the reduction has not been achieved. The Swiss government has expressed its intention to continue negotiations, but there may be a continued adjustment of the Swiss franc, which has been the strongest currency, due to concerns that this high tariff rate is slowing down the Swiss economy.