A 3D-printed miniature model of U.S. President Donald Trump, the Switzerland flag and the word "Tariffs" are seen in this illustration taken July 23, 2025. REUTERS/Dado Ruvic/Illustration/ File Photo

BERN (Reuters) -Faced with a strong Swiss franc and a drop in U.S. business due to tariffs, 31% of Swiss mechanical and electrical engineering companies plan to transfer some operations to the European Union, industry association Swissmem said on Tuesday.

Switzerland was this month hit with one of the highest U.S. tariff rates worldwide - 39%, compared with 15% in the neighbouring European Union - while the safe haven Swiss franc has strengthened around 13% this year against the U.S. dollar.

Many Swiss tech companies are gearing up to streamline and transfer businesses, Swissmem President Martin Hirzel said, based on a poll of member companies conducted after the levy came into effect on August 7 in which 385 firms participated.

"Dismissals are inevitable," he told reporters in Bern, adding that the scale of layoffs would depend on how quickly politicians could bring down the U.S. tariff rate.

Goods exports of the Swiss tech industry in the first half of 2025 dropped 0.9% year-on-year, driven by negative rates in Asia and stagnating demand in Europe, Swissmem said, calling the business trend in the second quarter particularly worrying.

While Swiss tech exports to the U.S. rose sharply in the first quarter, they slumped after the U.S. threatened tariffs in April, bringing overall order intake down 13.4% year-on-year in the second quarter, added Swissmem.

(Reporting by Ariane Luthi, Editing by Miranda Murray)