Swiss business association worries about rising protectionism under Trump

Republican Donald Trump will return to the White House with a supermajority, meaning the expected standoff will not occur. The stock market responded accordingly. But at the same time, many business associations worry about increased protectionism.

There are signs that Republicans will also gain majorities in the House and Senate, meaning Trump can govern without significant resistance. The resulting lack of uncertainty brings significant relief to the market. Concerns over unclear results have affected sentiment over the past few days.

Karsten Junius, chief economist at J. Safra Sarasin Bank, commented: “The Republican Party won a huge victory in the election, which means that the election result is beyond doubt.” At the same time, he added , Republican approval and related hopes for tax cuts could cause U.S. bond yields to rise and undermine hopes for a deep cut to key interest rates. “Donald Trump's electoral victory as the future and re-elected president of the United States has become a foregone conclusion on financial markets,” said trader Andreas Lipkow. “The losses have been absorbed and the year ends The rally has officially begun.”

SMI is rising

As of 10 a.m., Switzerland's leading index SMI was up 2.1% at 12,115 points. Share prices also rose significantly on other European stock exchanges such as Frankfurt, UK and France.

In this country, UBS (+4.3%), Julius Baer (+4.2%) and ABB (+4.1%) lead the way. For banks, the prospect of rising interest rates should provide some support.

Logitech, meanwhile, has a significantly negative discount of 3.3%. Kühne+Nagel (-2.2%) also recorded a sharp price drop in early trading.

Swiss business association worries about rising protectionism under Trump

Swiss Memory Association

Swiss business associations are concerned that protectionism could intensify following the election of Donald Trump, a survey by news agency AWP shows. Before the election, Trump called for sharply increasing tariffs on imported goods and strengthening the domestic market.

Industry association Swissmem expects the US government under new President Donald Trump to adopt more protectionism. The association announced on Wednesday on text messaging service X that it will change the geopolitical and global economic order.

For the Swiss technology industry, the United States is the second most important export market, accounting for 14%. Particularly for small and medium-sized enterprises (SMEs), which account for 90% of Swissmem's membership, access to the US market is as barrier-free as possible, the association writes.

According to Swissmem, Switzerland played a good trump card during Donald Trump's first term. Trump is open to technology. The Swiss economy should also be able to seize opportunities and leverage its strengths during his second term.

An active foreign trade policy is even more important now. Swissmem calls for the resumption of exploration of a free trade agreement with the United States. Switzerland itself must invest more in armaments to avoid creating a “security policy vacuum” in Europe.

pharmaceutical company

Pharmaceutical association Interpharma is critical of rising protectionism in the United States. He writes that framework conditions conducive to innovation are important for the research-based pharmaceutical industry.

The Chemical, Pharmaceutical and Life Sciences Industry Association shares the same sentiment: “There is concern that the protectionist trade policies of recent years will continue,” the association said in a statement. This would be against the interests of export-oriented companies in the industry. This problem is particularly acute as the United States is one of the most important sales markets for the association's members.

Economic relations continue to improve

Rahul Sahgal, CEO of the American Chamber of Commerce in Switzerland, called for calm after the election. Regardless of which party is in power at the time, economic relations with the United States have steadily improved over the past few decades. “That will continue to be the case,” he told AWP in an interview.

Jan Atteslander, member of the Economiesuisse management team and head of foreign trade, agrees. “We do not expect a significant change in trends.” Many Swiss companies are very firmly rooted in the U.S. market and the change in the White House is unlikely to have a major impact on their businesses.

Still, both sides see the danger of rising protectionism. However, under a Democratic president, the situation may be similar. Sagar said it was unclear whether Trump would be able to actually follow through on the proclamations he made before the election. To raise tariffs broadly across all trading partners, Trump would need a majority in both houses of Congress, but that is far from certain.

Switzerland could also gain an advantage

Sagar emphasized that Trump's election also brought advantages to Swiss companies. He believes that under a Trump presidency, regulations will be scaled back and tax cuts will be attempted, from which Swiss companies will also benefit, at least in the short term.

Economiesuisse economist Atslander said the expected tax cuts could also have an impact on Switzerland itself. This could make the United States more attractive as a location for Swiss companies, and more investment could flow to the United States. This could lead to Switzerland also taking steps to improve its own economic situation, Atslander continued.

Overall, Atsländer believes that Switzerland’s foreign trade policy requires a “smart diversification policy.” Switzerland must rely on free trade agreements with third countries and stabilize bilateral agreements with the EU. Switzerland is currently on the right track. (Standards Development Bureau/Africa Working Group)

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