The USA has become Switzerland’s most important trading partner. But the relationship needs to be nurtured.
Author: Sven Zaugg
11.08.2024, 08:55
Whether pharmaceutical products, machines or even gold: Swiss exports to the USA have more than tripled in the last 20 years. But this relationship needs to be nurtured. At the heart of this is the Swiss-American Chamber of Commerce. After almost two decades, there is a change there: Rahul Sahgal replaces the busy Martin Naville at the top.
At the interface between politics and business
White shirt, broad smile, self-confident demeanor. Proper, but not artificial. That is the first impression of Rahul Sahgal. The 48-year-old economist and lawyer with Indian roots grew up in Zurich. After jobs in the financial sector, he worked for the Winterthur-based machine manufacturer Rieter and the automotive supplier Autoneum. Then he joined the Swiss diplomatic corps: Brussels, Bern, then Washington DC.
Most recently, Sahgal served as deputy head of the tax department in the State Secretariat for International Financial Affairs (SIF). A CV that, he says, makes him ideally qualified for the job at the Chamber of Commerce. A job at the interface between politics and business.
The US market is central for Swiss companies: “The USA is our most important trading partner and at the same time the country that invests the most directly in Switzerland.” Switzerland’s prosperity depends on the USA.
Sahgal sees himself as a modern lobbyist who wants to use his connections in Bern and Washington to create the best possible conditions for US companies in Switzerland. There is still a lot to be done. “In my view, international companies are underrepresented in Switzerland. But they pay 48 percent of the corporate tax.” The main task of the Swiss-American Chamber of Commerce is to change that.
No alternative to the US market
What is of even greater interest at the moment is the question of who will move into the White House. The major Swiss players in the US market, Roche, Novartis and ABB, are largely reticent to make statements. When asked, they say they work with every government – whether Trump or Harris.
The danger that we, as a small, open economy, will be crushed between the USA and China certainly exists.
Sahgal agrees. Many Swiss companies are currently benefiting directly or indirectly from the Biden administration’s cash injections. Precisely because the companies operate in those sectors where the most money flows: for example, in the construction sector, green technologies or in health.
In addition, “There is no alternative to the US market. There are currently not many countries where you can invest and grow at the same time,” says Sahgal. So the USA remains the first growth market.
The future of the Inflation Reduction Act (IRA)
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The billions in subsidies for the US economy come from the so-called “Inflation Reduction Act”. Sahgal is convinced that this would not dry up even under a Trump administration: “The Republicans have strongly criticized the IRA. But it also primarily benefits the Republican states.” Most of the money flows to Republican states, and most jobs are created there. “The Republican governors have no interest in Washington changing that.”
So everything is fine? Not at all. Sahgal is also concerned about the protectionism in the USA, invented by Trump and exacerbated by Biden. Free trade without high tariffs is crucial for Switzerland to remain competitive. He believes that even a President Harris is unlikely to make any major corrections.
There are other challenges for Switzerland. The trade war between the USA and China, for example: “The danger that we, as a small, open economy, will be crushed between the USA and China certainly exists. Issues such as sanctions or investment controls are not off the table,” says Rahul Sahgal. So there is still plenty of work for the new head of the Swiss-American Chamber of Commerce.