This model estimates the impact of the introduction of US tariffs on next quarter’s GDP.
It implies that when the current 12.5% tariffs get removed, GDP forecasts should rise by 0.31 pp.
Our other GDP predictions are programmed to adjust accordingly if this is the case.
When the tariff decreased from 39% to 15%, the forecast rose by the difference of the two estimates.
The declines already took place in the next quarter after the tariffs got introduced, around late 2025. If the result box shows −0.5%, it means that specific tariff costed the Swiss economy 0.5% of its GDP.
The Pharma industry has faced a different rate than the rest of the economy. The estimates account for this fact and adjust accordingly.
Change a rate to model a new tariff-set.
In November 2025, the KOF Institute of the ETH Zurich estimated this impact at −0.20%. Our model’s prediction back then was −0.21%. The KOF Institute has not further updated its estimate.
Source: click here
The model behind our estimate was also compared to a DSGE model from the Swiss National Bank for the simulation of a 25 bp interest rate surprise. The SNB model predicted a −0.29% decline of next quarter’s GDP, our model −0.379%.
Source: click here
The model follows an augmented, partially calibrated IS-LM structure that we internally call Linear ASM. It is split in 3 parts.
The core one is powered by the IS-LM. It monitors changes in GDP subaggregates and quantifies their impact.
The second is responsible for estimating the magnitude of the initial export decline after the new tariffs. This is done with a combination of trade elasticities.
The last part matches different tariff-sets with their corresponding export declines. It also enables segregating the economy’s sectors under different tariff rates.
Together, they are capable of generating good predictions of GDP for situations where something external impacts the economy. Be it a new tariff, an increase of interest rates or augmented fiscal expenditure.
The model is estimated with data from 1998 to 2024.
The results shown at the top of the page silently account for further heterogeneity in tariff rates across economic sectors. For example, gold exports are matched with a 0% tariff and when increasing the pharma rates only a part of exports are affected as big companies like Roche and Novartis have struck deals that exempt them.
Detailed reports on the model’s structure are available on request via email.