The prospect of Donald Trump winning a second presidential term is worrying many Swiss citizens. And not without good reason – it would weaken Swiss national security and likely damage the economy.
It is now beyond doubt that Donald Trump will become the Republican Party’s presidential candidate. Only one obstacle stands between him and the White House – that of Joe Biden, who is in pretty good shape, as his State of the Union address proved, albeit at the age of 81. Biden goes into the election fight with historically low approval ratings, while Trump has secured the nomination in record time. What better moment to explore what a second Trump presidency would have in store for Switzerland.
Would the orange-tinged populist blow up American democracy and the postwar European security order? He has given vent to plenty of apocalyptic scenarios during the primary season, which would spell disaster for a small country like Switzerland. It seems unlikely, however, that Trump would follow through on his threats. His super-charged rhetoric caused enought trouble in 2016, and he only implemented a fraction of his plans when he withdrew the U.S. from the Paris Agreement and the Iran nuclear deal. His staff managed to stop him from abandoning NATO altogether, which his national security advisor John Bolton is convinced Trump would do now.
NATO and Ukraine Are the Critical Issues
Trump’s reelection would be bad news from a Swiss national security perspective. He preaches isolationism and vilifies NATO, and Switzerland benefits from its protective umbrella. When the similarly war-averse Barack Obama was in office, Vladimir Putin seized Crimea. Putin then felt emboldened enough to launch his all-out invasion of Ukraine in 2022 after Trump had undermined NATO and because he underestimated Biden and the EU’s capacity to act decisively without Angela Merkel.
Now, the Republican presidential hopeful is pledging to end the war in one day while also blocking financial aid through his lackeys in Congress. This indicates he would likely leave Ukraine high and dry and that Europe and Switzerland would, therefore, face not just a further emboldened Russia but also hundreds of thousands of refugees. Europeans would have to invest yet more in their own security.
Trump would seek to further chip away at multilateral bodies like the U.N. and the Convention on Climate Change. A fair number of Swiss nationals might also find it irksome, but a stable legal system is vital to their export-oriented Alpine economy. A reelected Trump – the man who attempted to mount a coup in 2021 – would further weaken U.S. democracy – an outcome that would not be in Switzerland’s interest either.
What about the Economy?
On the other hand, Ueli Maurer, former president of the Swiss Confederation, said in an interview that he would welcome Trump’s reelection. He believes that Switzerland—or rather the Swiss business community—fares better with U.S. Republican administrations than Democratic administrations and indeed enjoyed unparalleled access under Trump. Some are even reviving hopes of a free trade agreement.
Could former President Trump’s reelection be a godsend for the Swiss economy? Indeed, the country’s business sector has previously had no trouble dealing with presidents from either party. The United States has been Germany’s most important trading partner since 2021 – the destination for a sixth of all its exports, half of them pharmaceutical products. A fifth of Swiss foreign direct investments – some $2.85 billion (approximately 250 billion Swiss Francs) – flow into the land of seemingly endless opportunity. As such, events in the United States have consequences for the prosperity of Swiss citizens, but the person who occupies the White House has thus far been a less significant factor.
Trump initially lowered taxes and relaxed regulations, which benefited Swiss companies. However, he is now proposing a 10% duty on imports, which would throttle the Swiss export industry. It is also unlikely that a free trade agreement would be possible under either Trump or Biden since reducing tariffs on U.S. agricultural imports is a red line for Alpine farmers.
Business Is Booming under Biden
The U.S. economy is growing faster under Biden than it did under Trump. The markets are hitting record highs, and green investment incentives are pulling in capital. The Swiss business community can be just as happy or unhappy with Biden’s team as with any of his predecessors’ administrations. Switzerland managed to rapidly liquidate the megabank Credit Suisse, negotiate new agreements on pharmaceuticals and banking data and strengthen cooperation in the scientific sector. The greatest danger is the same for both candidates: they pursue a protectionist economic policy at the expense of a free international trading order, causing large global blocs to form and conditions in which small countries are easily overlooked.
Trump’s reelection would be bad news. Yet, so long as he stops short of pursuing his worst instincts, Switzerland ought to be able to adjust to such an event.
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