Swiss-China trade deal: what could it mean for FX exposure?
Wider tariff-free access could support bilateral trade. For Swiss businesses, it may also create larger or more frequent renminbi flows to manage.
FX Pulse
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On 20 August 2026, Switzerland and China announced that negotiations to update their 2014 free trade agreement had been concluded. The revised agreement would substantially widen tariff-free access for Swiss goods entering China, while also updating rules covering services, investment, digital trade and trade facilitation.
The announcement does not change tariffs immediately. The legal review is still under way, the two countries aim to sign the agreement by the end of 2026, and their respective domestic approval procedures must then follow.
Almost all Swiss exports to China could ultimately become tariff-free
Under the existing agreement, 53.6% of current Swiss exports to China qualify for duty-free access. The revised terms would raise this share to 77.5% when the agreement enters into force and to 99.8% over the medium term, after tariff phase-out periods of five to ten years.
SECO estimates the additional potential tariff savings at around CHF 244 million, with watches, machinery and pharmaceutical exports among the main beneficiaries. Once the tariff phase-outs are complete, watches, pharmaceutical products and precision instruments would become fully duty-free, as would around 100% of machinery and chemical exports. In 2025, bilateral trade in goods excluding gold and other valuables reached CHF 33.5 billion: Switzerland exported CHF 15.2 billion and imported CHF 18.3 billion.
An already existing momentum
In July, Swiss exports to China rose by 27.1% from June, while total Swiss exports increased by 13.8%. This monthly rise predates the revised agreement and should not be interpreted as an effect of it, but it illustrates the scale and variability of the trade flows involved.
The negotiations began in September 2024, before the latest US tariff measures, so the two developments should not be interpreted as directly linked. Even so, as Swiss exporters reassess market access and diversification, any increase in trade with China could create larger or more frequent CNY/CNH flows to manage.
The update would reach well beyond tariffs
The full legal texts have not yet been published and remain under review. Based on SECO’s summary of the agreed outcomes, the update would also reshape the rules governing investment, services and cross-border operations.
Sustainability and human rights - The revised chapter would make environmental and labour commitments binding and strengthen dispute settlement through expert panels. China also agreed, for the first time in one of its FTAs, to include a reference to the Universal Declaration of Human Rights in the preamble.
Investment - Swiss investors would receive better access to the Chinese market. The agreement would extend national and most-favoured-nation treatment to investments in non-services sectors, including manufacturing; prohibit requirements such as compulsory local content or technology transfer; and add transparency and simpler authorisation procedures.
Services - China would improve market-access commitments in technical testing and analysis, manufacturing-related services, financial services, aviation and maritime transport. In several covered sectors, Swiss companies would be guaranteed the right to own 100% of their subsidiaries. Financial-service providers established in China would also gain greater legal certainty around access to public payment and clearing systems.
Digital trade and customs processes - A new digital-trade chapter would promote paperless transactions and electronic documents. Updated origin rules would remove the general requirement for direct transport between the two countries and, under certain conditions, allow processing in a third country.
Competition, SMEs and supply chains - The revised rules would also cover state-owned enterprises, strengthen transparency and consultation, and expand cooperation intended to help SMEs use the agreement and make supply chains more resilient.
From the launch of negotiations to full tariff phase-out
Timing | Milestone |
|---|---|
September 2024 | The optimisation negotiations were officially launched. |
March 2025–July 2026 | Switzerland and China completed five rounds of talks. |
20 August 2026 | The two governments announced that negotiations had concluded. |
By the end of 2026 (target) | The parties intend to complete the legal review and sign the agreement. |
After signing | Domestic approval procedures must follow. No date has yet been announced for entry into force. |
On entry into force | 77.5% of current Swiss exports to China would be duty-free. |
Five to ten years after entry into force | The remaining tariff phase-outs would increase duty-free coverage to 99.8% of current exports. |
Lower tariffs do not remove the currency exposure
Tariff reductions can improve the commercial terms of a transaction, but they do not fix its value in Swiss francs. For an exporter invoicing in renminbi, a stronger CHF between pricing and settlement can reduce the CHF value of the amount received. If the invoice is denominated in CHF, the Chinese customer may instead bear the currency movement. Using USD as an intermediary adds another exchange-rate relationship rather than removing the issue.
For importers, almost all Chinese goods already enter Switzerland duty-free under the existing agreement. Their practical questions therefore remain centred on the invoice currency, the conversion route and the timing of payment. A supplier may request CNY, offshore renminbi (CNH) or USD, and each route can produce a different final CHF cost.
Tip: the SwissFx guide to paying suppliers in China explains how to compare these options.
What Swiss businesses can review before the agreement takes effect
The agreement is not yet in force. Businesses can nevertheless use the lead time to assess whether larger China flows could change the currencies used, the gap between pricing and payment and the net exposure after offsetting renminbi receipts and payments.
Where future amounts and dates become sufficiently predictable, businesses can then consider an appropriate FX risk-management approach.
This article is for informational purposes only and does not constitute investment, financial or risk-management advice.
Do you trade with China?
If your business expects larger or more frequent payments to or from China, SwissFx can help you review the currencies, timing and payment routes involved, and identify which future amounts remain exposed to exchange-rate movements.