SUISSE news Winter 2021
Business
January 2021

How a Norm-Breaking American Presidency Affected Switzerland

As Donald Trump has left the White House, we revisit his four tumultuous years in office and assesses their impact on relations with Switzerland.

After the election in November 2016 of the Republican Trump, who had campaigned largely on protectionist and populist slogans, then-foreign affairs minister Didier Burkhalter reassured the Swiss population that business would carry on as usual. “Switzerland can work with any US administration,” he said.

Over the four years that followed, the American president challenged that notion by pushing a foreign policy agenda that was at times unfavourable to traditional US allies. Instigating trade wars, pulling out of multilateral organisations and attacking the US electoral process were just some of the actions that drew dismay from other countries. Yet the US ambassador in Bern, Edward McMullen, told Swiss public television RTS this month that the two nations had deepened relations “in a historic way.” We assess whether the Trump years really were all that good – or bad – for Swiss interests at home and abroad.


America First
Economic issues dominate Switzerland’s relationship with the superpower, its second-biggest trading partner after the European Union. Exports to the US were already booming before Trump took office and continued to grow significantly during his tenure. “Business relations were really good,” said centre-right Radical-Liberal parliamentarian Christa Markwalder, a member of the foreign relations committee in the Swiss House of Representatives. In addition to a volume of exports to the US totalling CHF44 billion ($49 billion) in 2019, Switzerland is the sixth largest foreign investor in the US. 

With both a business-friendly president and ambassador in Bern, there was initially optimism that progress could finally be made on a bilateral trade deal, according to economist Stefan Legge. During the preceding eight years of Barack Obama’s administration, the Swiss had had trouble even bringing up the subject with the Americans.

But the Swiss were bound for disappointment. Although both Trump and McMullen expressed interest in striking a deal, American priorities lay elsewhere: with China, Canada, Mexico, and the European Union. “With the Swiss side ruling out substantial concessions in the agricultural trade, there was little to gain for the US side from a free trade agreement,” said Legge, a lecturer at the University of St. Gallen.

The US also had other plans for its economy: putting “America First” to prop up domestic industry. In 2018 the government launched a series of protectionist measures that included slapping tariffs on steel and aluminium imports.

The Swiss tried and failed to gain an exemption from the US – though in the end the impact of the tariffs on Swiss business was negligible, since exports to the US in this sector are not significant, said Legge. 

One of the main targets of the tariffs was China. The trade war between the two superpowers affected the Alpine nation indirectly, according to Markwalder: “Growing protectionism is a bad sign for an economy like Switzerland”, which depends on an open, rules-based system. The Trump administration has tested those rules with its aggressive tariff policies and multiple legal cases at the World Trade Organization.

US protectionism may not be a novel policy, but imposing tariffs was a bold move on Trump’s part. “Most policy-makers want to hide their protectionist policies by using non-tariff barriers,” Legge pointed out.

Different political cultures
Safeguarding American interests also caused ripples in international cooperation. The US pulled out of the Paris climate accord, the United Nations Human Rights Council and other world bodies – moves that caused disappointment in Switzerland, where multilateralism is a cornerstone of foreign policy, not to mention alarm in Geneva, the seat of countless international organisations. “The exit from Paris is really catastrophic for the entire multilateral effort, because you need the big CO2 producers onboard for it to work,” said Markwalder, who is a member of the US-Swiss parliamentary association.

The Swiss government tried to slip in a word about the agreement at a bilateral meeting with Trump, a climate change skeptic, at the 2020 World Economic Forum in Davos, but was met with indifference. Broaching the subject “was not very productive, because everybody knows where President Trump stands there,” McMullen said at the time. “The political culture under Trump was completely different from Swiss political culture,” said Markwalder. This even affected the way the two countries spoke to each other, she added. Whereas the seven-member Swiss Federal Council governs by consensus, the US president signed a series of executive orders to withdraw from international institutions.

High-level contacts
On security as well, Trump was prone to risky unilateral moves. In 2018 he withdrew the US from the agreement on Iran’s nuclear programme signed by Obama, and re-imposed sanctions on the Islamic nation. This development kept Switzerland busy in its good offices role representing US interests in Iran, which it has done since 1980. The country earned praise from the Trump administration for helping to secure the release of two Americans detained in Iran. It also set up a humanitarian aid channel for Swiss-based companies to supply food and medical goods to Iran through a payment mechanism backed by the US.

Tensions rose again in January 2020, when a top Iranian commander, Qassem Soleimani, was killed in an American airstrike. Swiss diplomats were very active at maintaining channels of communication open between the US and Iran – efforts that the Americans appreciated, said Markwalder. The protective power mandate in Iran is not just good for public thank-yous from the US president. According to Markwalder, it also provides a small country like Switzerland privileged access to high-level contacts within the State Department.

Equally significant was the intensity of high-level exchanges between the two countries. In 2019 then-president Ueli Maurer was invited to visit Trump at the White House for a bilateral chat in the Oval Office, a first for a Swiss leader. The country also had the ear of the president or senior officials on other occasions, including two trips by Trump to Davos and a three-day state visit to Switzerland by the Secretary of State, Mike Pompeo.

According to Pierre-Alain Eltschinger, a spokesperson at the Department of Foreign Affairs, the meetings “illustrate the excellent bilateral relations.” “They enabled us to have a very direct, open and honest exchange with the US, even on sensitive issues,” he said. Markwalder credits the US ambassador, a personal friend of the president who left his post this month, for opening those doors. “We were very lucky with McMullen for his close connections with Trump,” she said. “Previous ambassadors were further away from the president.”

Domestic tensions
Back home, Trump’s actions have been eye-opening for observers abroad, having exposed the country’s social divisions along racial and ideological lines. The president failed to condemn white supremacists who rioted in Charlottesville, Virginia in 2017, while the death of black men and women at the hands of police sparked protests in 2020. Then came his refusal to accept the results of the 2020 presidential election, won by Joe Biden, and the violent storming of the Capitol by Trump supporters. 

“That was really shocking,” said Markwalder. “Switzerland is a country that tries to bring people of different cultures and religious backgrounds together – national cohesion is key, and what we saw in the last four years is a deep split in American society, culminating in this attack on the Capitol.”

“Switzerland and the US share a lot of common values – human rights, democratic freedoms and the rule of law,” she continued. “We call each other ‘sister republics’ because we are uninterrupted democracies and that gives us common ground.”

This common ground has appeared shaky under Trump. But the Swiss government has expressed its faith in American democracy since the events on the Capitol. Although the incoming president faces a host of pressing domestic challenges, Markwalder pointed out that Biden “is an experienced foreign-policy maker. I’m convinced that he’s not just looking inward.”

In all likelihood, American attention abroad will continue to lie elsewhere, even if one of the last acts under Trump’s term was to brand Switzerland a currency manipulator. “For one, Switzerland is just not important enough,” said Legge, the economist. “The focus of the new Biden administration will be on China and the EU.” Markwalder believes Biden is aware that, if the US does not take a leadership role on the international stage, China will step in – and that should focus minds in Washington. “I’m very optimistic that multilateralism and America’s role [in the world] will be strengthened again.”

Source: swissinfo.ch
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