The recent U.S. election, which determined not only the presidency but also seats in the House of Representatives and a third of the Senate, is expected to have significant economic repercussions globally. Coface analysts warn that the U.S. economy, already prone to overheating, could see this trend intensify, affecting Swiss businesses, especially those operating in the American market.
To delve deeper into these potential impacts, Coface Switzerland hosted an online discussion on October 31 with Martin Naville, Senior Advisor to the Swiss-American Chamber of Commerce, and Klaus W. Wellershoff, former UBS Chief Economist and Chairman of Wellershoff & Partners. Together, they explored what each possible political scenario could mean for Swiss companies.
Protectionist trade policies under Trump
A second Trump presidency would likely ramp up protectionist trade measures, according to Coface’s analysis. Trump has already pledged significant tariffs, including a potential 60% on Chinese imports, and additional levies on other trade partners. Over time, such policies could disrupt global supply chains and drive up costs for American companies, indirectly impacting Swiss businesses, especially those that rely on stable global logistics.
A strategic approach to trade under Harris, with ongoing trade tensions
Kamala Harris, by contrast, would likely have taken a more strategic and moderate approach to trade, with targeted restrictions focused on China. Nevertheless, trade tensions would likely continue under her administration. Technology and energy sectors, in particular, could remain under scrutiny and be heavily affected by these ongoing challenges, according to Coface experts.
Inflation and interest rates: towards a tighter monetary policy?
Both candidates proposed extensive public spending, raising concerns around inflation and interest rates. Coface’s analysis suggests that an inflation spike could push the Federal Reserve toward more restrictive monetary policies, driving up interest rates. Although the dollar remains strong, ensuring favorable financing for the U.S., a second Trump term could threaten the Fed’s independence, potentially weakening investor confidence in U.S. monetary policy and heightening global economic uncertainty.
Implications for Switzerland: balancing uncertainties with stable trade relations
In the discussion hosted by Coface Switzerland, Martin Naville highlighted risks for Swiss industries, especially pharmaceuticals, which could face regulatory challenges under both Trump and Harris due to Harris’s critical stance on the sector. Naville noted that while the presidency holds significance, key decisions affecting the U.S. economy are largely made in Congress. He foresees a tight balance of power that would likely limit drastic changes.
A republican-led congress and rising uncertainty
Klaus W. Wellershoff added the possibility of a Republican-controlled Congress. He argued that uncertainties would likely rise under Trump, while a Harris victory might have created a more stable environment for Swiss businesses. Additionally, Wellershoff pointed out that trade wars could have considerable implications for Switzerland and its partners, especially in sectors involving capital goods.
U.S.-Swiss cooperation: stable and long-standing
Despite potential economic challenges, both experts agreed on the resilience of trade relations between Switzerland and the U.S. Martin Naville expressed confidence in this stability, underpinned by substantial Swiss direct investment in the U.S. Klaus W. Wellershoff emphasized the positive outlook, concluding, “America is a great economy,” with ample business opportunities for Swiss companies under either candidate.
Watch the full discussion
The recorded session with Martin Naville and Klaus W. Wellershoff is available here.
