The Swiss government has announced an extension of partial unemployment benefits to support companies affected by rising US tariffs. The move aims to limit layoffs, particularly in the watchmaking and small industrial exporting sectors.

In August, the White House imposed a 39% tariff on Swiss goods, significantly higher than the rate applied to the European Union. To mitigate the impact, Switzerland’s Federal Council has extended the maximum duration of partial unemployment compensation from 18 to 24 months. This extension, effective from November, is intended to help companies adapt to the challenging economic situation and avoid layoffs.

The machinery, electrical equipment, and metals industries, as well as the watchmaking industry, are among the most affected by the tariffs. Partial unemployment in Switzerland refers to workers who are forced to reduce their hours or not work at all while remaining officially on staff, with the government paying part of their salary.

The extension of partial unemployment benefits is not the first measure taken by the Swiss government to address economic challenges. In mid-2024, the benefits were already extended from 12 to 18 months due to a spike in energy costs. According to the Ministry of Economy, the unemployment rate in Switzerland remained relatively low at 2.8% in August and September. However, statistics on short-time work for these months are not yet available.

A study by Deloitte on the watchmaking industry, published on the same day as the government’s announcement, noted that 65% of watch component suppliers had already resorted to temporary work-hour reduction measures by July. This indicates the significant impact of the tariffs on the industry.

The Swiss government’s decision to extend partial unemployment benefits reflects its efforts to cushion the effects of the US tariffs and support affected businesses. As the global trade landscape continues to evolve, the extension of these benefits may provide some relief to companies in Switzerland, helping them to navigate the uncertain economic situation.