Tariffs and Geopolitical Risks: How Switzerland’s Banking Sector Can Stay Resilient

Rising geopolitical tensions and U.S. tariffs are weighing heavily on Swiss businesses. According to a recent commentary by EY Switzerland’s chairman, nearly 70% of Swiss firms have delayed or paused investments due to trade-policy uncertainty. For banks, this environment presents both risks and opportunities, as they remain at the center of how businesses and households respond to global shocks.

Trade Uncertainty and Its Impact on Business Decisions

Tariffs raise costs for exporters and create uncertainty for companies making long-term investment plans. In Switzerland, a nation deeply integrated into global trade, this uncertainty has led many businesses to hold back on expansion or innovation. When companies reduce investment, banks see weaker demand for loans and credit facilities, while deposits grow as firms prioritize liquidity over growth. This shift in behavior directly affects the flow of money through the financial system and slows broader economic momentum.

Consequences for Consumers and Households

For households, the effects are more subtle but no less important. Job insecurity and cautious business spending can reduce consumer confidence, limiting demand for mortgages, personal loans, and discretionary purchases. Families may keep their money in checking accounts or deposits rather than investing in longer-term financial products. With inflation and interest rate policies already influencing consumer budgets, tariffs and trade risks add another layer of pressure to household finances and banking relationships.

How Banks Are Affected

Banks are not only service providers but also intermediaries in times of uncertainty. When global trade slows, corporate clients borrow less, while credit risks increase for firms under financial stress. Interest rate margins may come under pressure if central banks respond with monetary easing, reducing profitability for lenders. At the same time, geopolitical volatility can encourage customers to seek stability in secure banking products, such as savings accounts, deposits, or fixed-rate mortgages. On the digital banking front, financial institutions have an opportunity to strengthen customer trust by offering transparent services, real-time credit monitoring, and flexible loan products that adapt to changing economic conditions.

Looking Ahead: Building Resilience

Rather than responding reflexively with protectionist countermeasures, experts suggest that Switzerland should focus on its strengths: innovation, financial stability, and openness. For the banking sector, this means supporting businesses with credit access during uncertain times, promoting digital banking solutions to enhance efficiency, and managing risks in mortgage and loan portfolios carefully.

Closing Insight

The combination of tariffs and geopolitical risks will remain a defining factor for Swiss banks and their customers in the years ahead. To stay resilient, banks must balance risk management with innovation, offering customers secure deposits and competitive loan products while embracing digital banking to build trust. For households and businesses alike, the key will be maintaining flexibility—whether through diversified savings, prudent credit use, or long-term mortgage planning—in a world where global trade frictions are here to stay.

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