Swiss export crisis Dispute with U.S. and Export Crisis Put Swiss Arms Industry Under Pressure

Swiss industry association Swissmem has responded to the escalating export crisis with a 10-point plan. Following failed tariff negotiations with the U.S., it is also calling for a revision of Switzerland’s 'Kriegsmaterialgesetz' (War Materiel Act). Only then, it argues, can trust among international partners be restored—and Switzerland’s long-term security maintained.

Swissmem—the umbrella association representing the Swiss tech industry—calls it a horror scenario: As of August 7, the U.S. government has imposed a 39% import tariff on Swiss products—a major blow following what Swiss authorities view as failed bilateral negotiations. For Swissmem this is yet another sign that Switzerland’s export strategy needs a fundamental overhaul.
 The association represents Swiss companies employing around 330,000 people, 96% of which are SMEs. The sector relies heavily on international markets, with exports accounting for 78% of total output.
 Tighter export regulations for Swiss war materiel and the breakdown of talks with the United States are putting increasing pressure on Switzerland’s export-driven economy. In response, Swissmem has unveiled a comprehensive 10-point program. One of the central demands: reforming the Kriegsmaterialgesetz (War Material Act, KMG/ WMA) to once again allow arms exports to trusted partner countries.

Eroding Trust in Europe

According to Swissmem, current legal restrictions on arms exports have led to a significant loss of trust among European partner states. Since Switzerland tightened its KMG /WMA in October 2021, orders from countries like Germany, Denmark, and the Netherlands have plummeted. These nations are deliberately avoiding Swiss military equipment—mainly for two reasons:

1. NATO Blocker: Switzerland is prohibited from exporting arms to any NATO member state involved in an armed conflict. This applies not only to complete weapon systems but also to components and spare parts.

2. Re-export Ban: Swiss war materiel cannot be resold or shared freely among NATO allies—posing a major obstacle to the interoperability of European armed forces.

Swissmem Warns of Industrial and Security Risks

Swissmem warns that these restrictive rules are not only isolating the Swiss defense sector economically but also threatening Switzerland’s national security. Without a strong domestic defense industry, the Swiss army would struggle to maintain operational readiness in the long term.

The association is therefore calling on the National Council to fully approve the KMG/ WMA reform passed by the Council of States during the upcoming fall session. This, Swissmem argues, is essential to resume exports to friendly nations and to restore confidence in Switzerland as a reliable supplier.

Referendum Announced Against Law Reform

However, the debate remains highly contentious. Opponents of the KMG / WMA revision have already announced a referendum. The political battle is expected to reignite fundamental questions surrounding Switzerland’s arms export policies and their impact on both national security and economic sovereignty.