In the afternoon, as part of a media conversation, Korte gave insights into the background to Trump‘s surprisingly clear election victory. According to Korte, this is based on strong anti-establishment sentiment among the US population. The Democrats have failed to convince Americans of their course. “Americans feel no better than they did four years ago,” Korte commented, citing the continued high cost of living and inflation. A side effect: Switzerland receives 30% of its tourists from the USA in urban areas – more than ever before. Prices in Switzerland have become affordable for many Americans.
Trump’s new tariff policy: The “most beautiful tariffs in the world”
Trump plans to continue his protectionist tariff policy. “Tariffs are the most beautiful word today,” Korte quoted the president as saying. Trump’s plan includes, among other things, 60% tariffs on imports from China and an additional 10-20% on imports from other countries, including Switzerland. Companies like UBS, which are heavily active in the American market, could be affected. However, this could also bring advantages for Swiss companies that produce directly in the USA, such as Holcim or some pharmaceutical companies, while China would be the clear loser. An example: 1% of the toys sold in the USA come from the USA itself, 70% from China.
Stock and bond markets: optimism for 2024, risks for 2025
The markets reacted to Trump’s election victory with a significant increase, but Korte warned about the year 2025. The first year after an election is often the weakest economically in a presidential term. The US bond market is already showing signs of stress, which is putting pressure on the interest rate markets. According to Korte, the central bank will remain stable, even if Trump would like to influence it. “Trump can’t override all the rules,” emphasized Korte. He considers the removal of central bank chief Jerome Powell to be unrealistic.
Winners on Wall Street: Big Tech and the energy sector
Trump’s renewed election victory fueled the tech industry, with BigTech stocks and Tesla in particular rising sharply. Korte expects Elon Musk to play a key role in Trump’s future Government Efficiency Commission. Oil and gas companies could also benefit from Trump’s energy policies. However, Korte predicts economic difficulties for the US dollar in 2025 and increasingly sees the strong cryptocurrencies as a potential risk in the institutional investment sector – for example in pension funds.
Domestic political challenges: migration and debt
Trump could take tough measures on migration policy, including the possible expulsion of up to 15 million migrants. The exit of millions of workers, particularly in certain sectors such as agriculture, could cause wage increases, which in turn could increase inflationary trends. The US debt burden of 5.7 million also remains a sensitive issue – interest payments are now the second largest item in the US budget.
Geopolitics: No warmonger Trump
From a geopolitical perspective, Korte does not see Trump as an aggressor. “Trump has no interest in military conflicts and will not leave NATO,” said Korte. However, Taiwan remains a sensitive point because a conflict over the island could jeopardize the entire global economy, as a large part of semiconductor production depends on China. The question is whether China or the USA want to provoke this.
Jens Korte’s appearance at Cinewil clearly showed how great the interest is in the global effects of Trump’s policies. Visitors to the Raiffeisen Forum left the event with a new understanding of the potential challenges and opportunities that Donald Trump’s presidency could bring to Switzerland and the global economy.
