* Latest Developments in Swiss Politics: Key Points to Understand
Donald Trump's Policies May Take a Bite Out of Geneva's Economy
Look out, Geneva! The economic consequences of Donald Trump's decisions are looming large, and it's not just the luxurious watch industry that's sweating it out.
After pulling out of the Geneva-based World Health Organization (WHO), expect Trump to continue withdrawing his country from other UN agencies, leading to a potential disaster for Geneva's economy. With international organizations generating a significant portion of Geneva's revenue, the city could be hit hard.
"This economic blow will affect the area's livelihood," former Swiss president Micheline Calmy-Rey told Swiss media.
Swiss watchmakers, who exported 17% of their wares to the US in 2024, are the first to feel the heat. As tariffs on Swiss watches increase by 31-32%, smaller Geneva-based suppliers might not survive unless they can bear the additional costs.
Medical technology and machinery, which account for 23% of Swiss exports to the US, could also face reduced competitiveness. The good news is medicines are currently exempt from tariffs, so the pharmaceutical and biotech sectors might remain unfazed.
Other industries in Geneva may suffer from global supply chain disruptions if European production declines due to declining European manufacturing caused by Trump's policies.
Swissmem, a trade association, has warned that potential job cuts could happen in Geneva's high-skilled sectors. The Swiss government, however, has ruled out retaliation, leaving companies to rely on federal subsidies or sector-specific aid.
The economic repercussions of Trump's policies in the US might add to the woes. JPMorgan projected Trump's tariffs could reduce U.S. disposable income, potentially leading to a consumer spending contraction, which could threaten Swiss exports further.
Curious about the arbitrary 31% tariff calculation? Some claim it includes charges for alleged "currency manipulation," increasing the uncertainty for Swiss exporters.
While Geneva's diversified economy offers some insulation, its manufacturing and export-reliant sectors remain vulnerable to prolonged U.S. trade policies. So, buckle up, Geneva; it's going to be a bumpy ride!
- Trump's continued withdrawal of the US from UN agencies, such as the Geneva-based World Health Organization, could lead to a potential disaster for Geneva's economy in 2025.
- Smaller Geneva-based suppliers of watches, which account for a significant portion of the city's revenue, may not survive the increased tariffs on their exports to the US.
- Medical technology and machinery, which make up 23% of Swiss exports to the US, could also suffer reduced competitiveness due to these tariffs.
- European production declines caused by Trump's policies could lead to global supply chain disruptions, affecting other industries in Geneva.
- Swissmem, a trade association, has warned that potential job cuts could happen in Geneva's high-skilled sectors, leaving companies to rely on federal subsidies or sector-specific aid.
- JPMorgan's projection that Trump's tariffs could reduce U.S. disposable income could lead to a consumer spending contraction, further threatening Swiss exports and adding to Geneva's economic woes.
