Five × Five: Forced Labour or US Trade Policy? What Swiss Entrepreneurs Must Know About the New US Trade Measures

24 Jun 2026

In August 2025, Washington imposed a 39% tariff on Swiss exports. In November 2025, however, the United States, Switzerland and Liechtenstein reached a framework arrangement that reduced the rate to 15%, with Switzerland committing approximately USD 200 billion of investment in the United States. The reduced tariff rate took effect retroactively on 14 November 2025 (White House).

The November 2025 framework arrangement reflected not only tariff discussions but also the broader strategic economic partnership between the two countries. The United States and Switzerland are among each other’s most important economic partners. Bilateral trade and investment ties are substantial, with Switzerland ranking among the largest foreign investors in the United States and many Swiss companies maintaining significant operations and employment in the U.S. market. The relationship extends far beyond trade in goods and services and is supported by significant cross-border investment, innovation and industrial cooperation.

Currently, the framework arrangement remains a non-binding letter of intent, and negotiations on a comprehensive bilateral trade agreement are still ongoing.

In February 2026, the U.S. Supreme Court ruled that the emergency-powers basis for the reciprocal tariffs was unlawful. A few months later, on 2 June 2026, U.S. Trade Representative Jamieson Greer (“USTR”) issued findings under Section 301 of the Trade Act of 1974 naming Switzerland among 60 economies that allegedly fail to prohibit and effectively enforce restrictions on imports of goods made with forced labour, and proposing an additional tariff of 12.5% (USTR; White House).

What exactly are the proposed US trade measures and on what legal basis?

The Office of the United States Trade Representative’s (USTR) findings of 2 June 2026 are framed as actions under Section 301 of the Trade Act of 1974: the office determined that the failure of 60 economies to impose and effectively enforce a prohibition on importing goods made with forced labour is unreasonable and burdens US commerce (USTR). Economies that already impose or have committed to impose such an import prohibition, or that operate a partial regime, would face an additional 10%; all other economies, Switzerland among them, would face 12.5%. The proposed measures form part of a broader trade-policy framework available to the United States following the Supreme Court’s February 2026 ruling.

The difference in tariff rates reflects the issue at the center of the USTR findings. Switzerland is placed in the 12.5% category because it does not have a ban on imports made with forced labour, not because it permits or supports forced labour. The proposed measures are not yet final: a consultation process and public hearings must take place before any tariff can be adopted. If implemented, the new tariffs would be added to the existing 15% framework rate while negotiations on a broader trade agreement continue. The legal basis is also significant. Following the Supreme Court’s invalidation of the administration’s emergency-powers tariffs in February 2026, Section 301 has become one of the principal legal mechanisms available to the United States for addressing trade concerns.

Are the findings justified, and where does Swiss law actually stand?

The Federal Council rejects the findings made in the course of this investigation and will argue during the USTR hearing process that Switzerland’s approaches to combating forced labour “differ in method, but not in their aim or effectiveness. Switzerland’s approach does not harm US industry” (SECO).

Comprehensive prohibition: forced labour is prohibited in Switzerland under constitutional, civil and criminal law. Switzerland has ratified ILO Convention No. 29 on Forced Labour (1930), Convention No. 105 on the Abolition of Forced Labour (1957) and the 2014 Protocol to Convention No. 29 (SECO).
Procurement pioneer: Switzerland was the first country to write a forced-labour ban into its public-procurement legislation, for example: Federal Act on Public Procurement (PPA), Art. 12 and Intercantonal Agreement on Public Procurement (IAPP), Art. 12.
Existing due diligence: Swiss companies already carry due-diligence and transparency duties under Art. 964j–l of the Swiss Code of Obligations and the implementing ordinance, covering child labour and conflict minerals.

In short, Switzerland already has strong rules against forced labour. It has ratified the relevant ILO conventions, requires due diligence in high-risk areas and applies international labour standards in public procurement. Against this background, there are strong grounds to question whether the USTR’s findings accurately reflect the effectiveness of the Swiss system. The timing of the investigation, while broader trade negotiations remain ongoing, also suggests that the proposed tariffs may function as a trade-policy and foreign-policy instrument within wider economic discussions between the two countries.

What is the real gap — due-diligence duties vs. an import ban?

There is, however, one important difference. Switzerland focuses on regulating corporate conduct through due-diligence and transparency obligations, but it does not operate a general border-enforced prohibition on the importation of goods made with forced labour.

United States: Section 307 of the Tariff Act of 1930 and the Uyghur Forced Labor Prevention Act (UFLPA) allow Customs authorities to detain goods suspected of being made with forced labor and establish a rebuttable presumption for certain origins.
European Union: Regulation (EU) 2024/3015, in force since December 2024, applies from 14 December 2027 and empowers authorities to block or withdraw such products from the EU market, regardless of company size or sector (EUR-Lex).
Switzerland: Switzerland relies primarily on corporate due diligence, transparency obligations and procurement rules. While the Federal Council’s proposed Act on Sustainable Corporate Governance would strengthen due-diligence requirements, it would still not introduce a general import ban on goods made with forced labour (Federal Council media release).

This structural difference is exactly what the US is exploiting and the point Switzerland should address proactively.

What does this mean for entrepreneurs and family offices with cross-border supply chains?

Three distinct exposures deserve board-level attention:

Tariff and cost exposure: a 12.5% surcharge stacked on the 15% framework rate would compress margins and force repricing for US-bound goods.
Regulatory exposure: from December 2027 the EU can block forced-labour goods at its border irrespective of company size, and US Customs already detains shipments under the UFLPA. Cross-border groups need EU- and US-grade diligence well before then.
Governance and liability exposure: As Swiss due-diligence obligations tighten, boards will face greater responsibility for ensuring that supply-chain risk management and documentation are adequate.

Family offices with holdings in industrial, manufacturing or consumer-facing businesses that import from or export to international markets should pay close attention. Even where individual portfolio companies fall below current Swiss thresholds, they may still be affected by U.S. and EU forced-labour rules through their supply chains, customers or distribution networks.

What should you do now and how does LINDEMANNLAW help?

Tariffs, sanctions and export controls have increasingly become foreign-policy instruments used by governments to advance economic, strategic and national-security objectives. Businesses operating internationally must therefore assess not only traditional commercial risks but also the broader geopolitical and regulatory environment in which they operate.

Map your exposure: identify products and supply chains containing the US and EU markets, and assess the impact of potential tariff scenarios, including the proposed 10% / 12.5% surcharges.
Upgrade supply-chain diligence and traceability: align internal controls, supplier verification and documentation with the standards expected under the EU Forced Labour Regulation and the US UFLPA well before they become business-critical.
Use the open channels: the US consultation runs until early July; affected parties can make submissions.

How LINDEMANNLAW helps. The window to act is narrow, and the stakes are too high to adopt a wait-and-see approach. Pricing, market access and the terms of any final trade arrangement all hang in the balance. LINDEMANNLAW has extensive expertise in sanctions and tariffs as foreign policy instruments, export-control regimes, trade compliance, regulatory investigations and international dispute resolution. We assist clients in assessing exposure to trade measures, conducting supply-chain and counterparty due diligence, strengthening compliance frameworks, engaging with regulatory authorities and developing practical strategies to preserve market access in both the United States and Europe.

Where disputes arise, we represent clients in administrative proceedings, litigation and arbitration, combining legal precision with a clear understanding of commercial realities.

If your business may be affected by the proposed U.S. measures, contact our team for a confidential assessment of your exposure and the options available to mitigate risk and protect your position.

Disclaimer: This article is provided for general information purposes only, reflects the position as at June 2026, and does not constitute legal or tax advice. For advice tailored to your specific circumstances, contact LINDEMANNLAW.