Switzerland
EU industrial strategy puts Switzerland’s single-market relationship under strain
The EU’s increasingly protectionist industrial strategy is creating friction with Switzerland and other closely integrated European partners.
The EU’s industrial policy is reaching into Switzerland’s economic relationship with Brussels. As the bloc responds to competition from China and the United States, it is deploying subsidies, tariffs and domestic-production requirements that can affect companies outside the EU, including Swiss exporters woven into European supply chains.
Switzerland, Norway, Iceland and Liechtenstein have built close economic ties with the bloc by adopting broad areas of EU regulation and contributing to European programmes. Their reward has been varying degrees of access to the EU’s 450 million consumers. Their exposure is now changing as Brussels places greater emphasis on where goods are processed, manufactured and sourced.
Swiss officials told the Financial Times that the problem often arises through rules designed without Switzerland in mind. Bern increasingly has to intervene when a measure treats Switzerland as a distant third country, despite the daily movement of components, services and waste across national borders.
The dispute matters beyond individual regulations. The EU is Switzerland’s largest trading partner, while Swiss companies depend on predictable access to factories, customers and logistics networks across neighbouring member states. Each new exclusion adds uncertainty to a relationship that already requires constant negotiation.
Protective Rules Expose Supply Chains
“Made in EU” requirements are becoming a practical risk for Swiss suppliers. The State Secretariat for Economic Affairs warned that new industrial initiatives should recognise “the entire European value chains, including Switzerland” if Brussels wants to improve Europe’s resilience and competitiveness.
That concern is rooted in how Swiss industry operates. A product labelled Swiss Made may rely on specialised components, processing capacity or customers in Germany, France, Italy or Austria. A rule that reserves subsidies, procurement opportunities or strategic support for EU-based production can therefore affect a Swiss company even when its output feeds directly into European manufacturing.
Bern says the exclusions are often unintended rather than deliberately discriminatory. The distinction offers little comfort to businesses facing new compliance checks or investment decisions. Companies may need to document their origin status more closely, redesign sourcing arrangements or absorb higher costs to remain eligible for EU-backed projects.
The Swiss government has pressed Brussels to include the country in measures intended to strengthen European industry. One Swiss official told the Financial Times: “It is beneficial for them to include Switzerland.” The argument is economic as much as diplomatic. Removing integrated suppliers from European programmes could weaken the production networks the EU is trying to protect.