When US President Donald Trump hit Switzerland with punitive tariffs last year, Nabil Francis’s first reaction was shock. "It was a wake-up call," says Francis, the chief executive of Felco, a company known for its high-quality garden tools. "You understood that the world was changing when Switzerland was treated differently to the EU." For generations, Felco had been making its signature red-handled secateurs at its base among the green hills of the French-speaking canton of Neuchâtel. Around 95 per cent of production is exported to more than 120 countries, with the family-owned group counting King Charles of the UK and US former first lady Michelle Obama among its customers. Suddenly, it faced a tariff of 39 per cent on shipments to its single biggest market, compared with a 15 per cent levy applied to EU-based rivals.

But Francis’s response was not to start moving manufacturing to cheaper countries, nor to make Felco’s shears cheaper. Instead, it was to make them more expensive and more desirable, adding options such as leather-wrapped handles, gold-coated blades and laser-engraved personalisation that pushed the price above SFr100 ($125). Felco’s strategy of doubling down on quality and reputation is typical of Switzerland, where manufacturing still accounts for almost 19 per cent of GDP, twice the contribution from its celebrated financial services industry.

The white cross on a red background, emblazoned on products from Heule precision tools to Caran D’Ache pencils, is both a guarantee of quality that is understood worldwide, and a valuable marketing device for Swiss manufacturers. But it is becoming more difficult to execute as the franc appreciates, hurting the exports that generate half of Switzerland’s economic output, and major trading partners turn to protectionism and tariffs. Moves to increase flexibility by introducing additional definitions of Swissness besides "Swiss Made" have provoked a backlash from some lawmakers and manufacturers.

Switzerland this year slipped from first to third in a ranking of global competitiveness by IMD, the business school, while its economic performance ranking plunged from 13th to 37th, largely because of a deterioration in investment flows and weaker employment. "The Swiss model is hardly sustainable in a world that is more fragmented and more protectionist," says Arturo Bris, professor of finance at IMD. Swissmem, the country’s largest industrial association, described 2025 as a "lost year" in which sales stagnated and 6,600 tech-industry jobs disappeared. A tentative but uneven recovery is now under way, with SME sales falling 3.8 per cent in the first half of 2026 even as high-tech manufacturing overall grew 2.5 per cent.

Back in Neuchâtel, Francis acknowledges there is "a limit to everything" in terms of premiumisation. But Felco has not yet reached it; a new range, set for launch in September, swaps the famous red for anodised aluminium in bold colours such as Electric Blue, Power Green, Pink Passion and Tangerine Blaze. He wants to turn the humble pruning shear into a "lifestyle object" similar to Le Creuset, whose brightly coloured cookware has become a kitchen style statement.

The focus will remain resolutely upmarket. "If you are an industrial company producing in Switzerland and exporting, you’re not going to shoot at the mass market," says Francis. "At that game, you will always lose." A landlocked country of 9mn people, with few natural resources and some of the world’s highest wages, is not an obvious starting point for a manufacturing success story. But the Swiss made it work. Companies responded to high wages and an appreciating currency by becoming more productive, more specialised, more sophisticated and more expensive, while focusing on global markets rather than their small pool of domestic consumers. "Swiss Made" became shorthand for the result: watches, machinery and precision tools good enough that customers around the world would pay extra for them.