What Donald Trump decides will have a "huge impact" on the Swiss economy, according to economiesuisse

The fact that Donald Trump confirmed to President Alain Berset at the WEF that he wants to work more closely with Switzerland in the future is seen by economiesuisse as a "welcome signal". It is obvious that the decisions of the U.S. president will have a major impact on Swiss companies, write Jan Atteslander, head of foreign trade, and Marc Engelhard in a Article on the website of the umbrella trade association. Looking at figures from the export statistics of the Swiss Federal Customs Administration, the authors name five reasons why the USA is so important for Switzerland. After all, the USA ranks second behind Germany with a trade volume of 88 billion Swiss francs and 46 billion. The large trade surplus should also be noted: This amounts to 17 billion francs and is higher for no other trading partner.

Reason 1: "Made in Switzerland

The first reason why the USA is so important for Switzerland is the exported value added. After all, the customs statistics only provide information on the gross figures. All intermediate inputs and individual parts that are purchased by Swiss companies abroad are also included. The OECD regularly collects figures on the value added actually exported. For the USA, this amounts to 34 billion US dollars, i.e. 13 percent of Switzerland's total exported value added. Only to Germany is more Swiss quality sold. In the eyes of economiesuisse, therefore, "Made in Switzerland" continues to be a cash cow in the United States.

Reason 2: USA as top customer for services

It is a fact that the service sector is growing. However, economiesuisse fails to mention at whose expense this growth is taking place. After all, it should not be forgotten that the industrial sector in Switzerland is shrinking overall. Exports of services now account for one third. According to the Swiss National Bank, Swiss service providers generate around CHF 33 billion in sales in the United States with services (excluding tourism). The United States is thus the most important trading partner in this sector. By comparison, Swiss service companies generate sales of CHF 12 billion with Germany.

Reason 3: Desire for free trade

The largest share of importing and exporting companies are SMEs. Some of these are global market leaders in their fields. If you ask SMEs which country Switzerland should cultivate better trade relations with, they answer most frequently: the USA. According to a 2014 Credit Suisse survey, the franc shock is likely to have strengthened the desire for a free trade agreement with the USA. According to Swiss SMEs, it is a "major omission" that no such agreement exists between Switzerland and the USA, says economiesuisse.

Reason 4: USA as investor

Donald Trump should be pleased: Many Swiss companies are already investing in the US. According to the SNB, the capital stock in the United States amounts to CHF 234 billion. Conversely, the US also invests heavily in Switzerland: it is the third most important direct investor, behind Luxembourg and the Netherlands. It is therefore clear, says economiesuisse, that any measures Donald Trump takes on tax and investment issues will have a direct impact on Switzerland as a business location.

Reason 5: Still a lot of potential

According to economiesuisse, the U.S. offers the opportunity for enormously high trade profits for Swiss companies. In this respect, the American market is comparable to the EU. However, the current trade figures indicate that much more is possible. One prerequisite, however, is optimal trade access in the U.S. economiesuisse is therefore pleased that Donald Trump has confirmed to President Alain Berset that he wants to cooperate more closely with our country. According to economiesuisse, both sides would benefit from a free trade agreement, based on the figures cited here.

More information: Position paper from economiesuisse