Will Emmi cheese now be 39 percent more expensive in the US? No, US tariffs work differently.

39 percent – ​​this figure has become etched in the collective consciousness of the Swiss. But less clear than the amount of Trump's punitive tariff is the question: 39 percent on what exactly?

Many people might spontaneously say: If a Rolex was advertised in a New York shop window for $10,000, it now costs 39 percent more. If Gruyère from Switzerland was sold for $10 over the counter of a specialty store in San Francisco, the price might now rise by 39 percent.

But that's a misunderstanding. US tariffs aren't paid in stores. Rather, they are added to the value of a good upon import into the US. In technical jargon, this is called the customs value. The example of Swiss Gruyère cheese illustrates how the mechanics of tariffs work.

The journey of a Gruyère begins in western Switzerland. Farmers sell their cows' milk to a cheese dairy, which produces Gruyère according to the rules governing the Protected Designation of Origin (Appellation d'Origine Protégée, AOP).

A significant portion of the cheese wheels are then sent to Emmi for maturation. The Lucerne-based company refines the cheese, for example, in its Kaltbach caves . After up to 13 months, the Gruyère is ready for sale.

Around half of the Gruyère produced in Switzerland is sold at home. However, the USA is the most important export market : In 2024, 14 percent of total production – more than 4,000 tons – was sold there.

The largest exporter is Emmi. The company first transports the cheese to a North Sea port such as Rotterdam, Antwerp, or Hamburg. From there, it continues by ship.

The decisive moment from a customs perspective is the arrival at the American port: This is where Trump's tariff hammer falls. Specifically, this happens when Emmi Switzerland sells the cheese to Emmi USA. Emmi must declare the customs value of the cheese on the documents submitted to US Customs and Border Protection. The import duty is calculated based on this value.

"The customs value essentially corresponds to the transaction value of a good," says Simeon Probst, Head of Customs Consulting and International Trade at PwC Switzerland. "This is the price the importer pays or has to pay to receive the goods." Customs duties are paid by Emmi USA – the subsidiary that handles the cheese for further distribution in the Americas.

The customs value essentially includes all the added value created up to that point: the production of the milk, the work of the cheese dairies, Emmi's costs for ripening the cheese wheels, fees for the AOP license, administrative expenses, transport to the US border, and even a profit margin for Emmi Switzerland. What companies must include in the customs value is stipulated in a World Trade Organization (WTO) agreement on customs valuation.

But how high is the customs value of a Gruyère? Emmi declined to provide any information on this when asked. Other Swiss export companies also generally do not disclose information on the customs values ​​of their goods. This figure is crucial for determining how much the US tariffs are impacting the Swiss economy.

However, the customs value of a Gruyère cheese can be roughly estimated based on Swiss customs statistics. In 2024, Swiss companies exported hard cheese to the USA worth 110,958,889 Swiss francs. The weight of the exported goods was 8,398,876 kilograms. This results in an average export value of approximately 13.20 Swiss francs per kilogram. In practice, the customs value often does not exactly correspond to the export value that a company reports to the Swiss customs statistics, but the values ​​are likely to be close.

This means that since August 7, an estimated additional US tariff of 39 percent times CHF 13.20 has been levied on Swiss export cheese. Approximately CHF 5.15 per kilogram must be paid to the US customs authorities (converted into dollars, of course).

The new tariff replaces the 10 percent tariff that had already been in place on Swiss goods since the beginning of April. From April to July, an additional tariff of an estimated CHF 1.32 per kilogram (10 percent times CHF 13.20) had to be paid on Swiss cheese. In addition, the US already levied import tariffs on Swiss cheese of 6 to 10 percent, but this is not discussed here.

Companies have various options for dealing with tariffs. Often, the burden is shared : Companies bear part of the tariff costs themselves and pass the rest on to US customers. In the case of Gruyère, however, Emmi is likely to add the entire tariff cost to the prices for American customers. This is partly to protect its profit margin, and partly because demand is not very price-sensitive: Americans view Gruyère as a luxury product that they buy on special occasions such as holidays. What does a full pass-through mean for the retail price of a Swiss Gruyère?

Probably the cheapest Gruyère available in the US in mid-August was on offer at Walmart: $6.97 for a 6-ounce (170-gram) Emmi Le Gruyère AOP. That's equivalent to CHF 32.80 per kilogram.

This price reflected the situation before Trump's 39 percent tariff shock: Emmi had already added the 10 percent tariff in April and further increased prices due to the weak dollar exchange rate.

With the new 39 percent tariff, this cheese will become even more expensive: The price is expected to rise from CHF 32.80 to an estimated CHF 36.60. In stores, the price increase is expected to be around 12 percent.

Most Gruyère, however, isn't sold at Walmart, but in specialty stores—especially the more refined Kaltbach Gruyère. In mid-August, it was selling for at least $10.99 for a 5-ounce package. That's equivalent to 62 Swiss francs per kilogram.

Assuming that a Kaltbach Gruyère has a similar customs value to other Swiss export cheeses, the 39 percent tariff is likely to increase the product's price by around 4 francs – from 62 francs to 65.90 francs per kilogram. This corresponds to a price increase of 6 percent. Trump's punitive tariff will therefore have less of an impact on the more expensive cheese.

The sample calculations show that Swiss products will not become 39 percent more expensive in the US. This is because the tariffs are not calculated on the retail price, but on the customs value.

And this customs value is often significantly lower than the retail price. For consumer goods, it's often half or less, because a large portion of the margin is attributable to trade in the US. This likely also applies to other Swiss export products such as Nespresso capsules or luxury watches . With Trump's punitive tariff, "Swiss-made" will become more expensive for US consumers – not by 39 percent, but perhaps by 10 to 20 percent.