“With Biden as president, it will be much more difficult to get the Swiss position heard in Washington.”

Joe Biden won the race for the presidency of the United States. Mr. Naville, is this good or bad news for business?

There is still no clear answer to that. The bigger question is: what will Joe Biden’s cabinet look like? Is there a government with pragmatists who focus on viability and commitment? Or is your vice president and possible successor Kamala Harris putting the stamp on the cabinet? It politicized the extreme left in the Senate. I have seen Harris as a charismatic and energetic politician, so this second variant cannot be ruled out.

However, the elections were so close that the Democrats would drive away many voters with a marked left course.

I see the limits of such a policy, especially in the Senate. Currently, it seems that Republicans will barely be able to defend their majority. This will act as a brake on overly progressive ideas.

Martin Naville is director of the Swiss-US Chamber of Commerce.

NZZ

Does that mean there won’t be many changes?

With a pragmatic Biden cabinet and a Republican Senate, on the one hand, the tonality of the White House will change, which is very positive. On the other hand, the US will rejoin the Paris Climate Agreement. Biden will also try to talk to Iran again. And it will be friendlier to its NATO partners. The problem that the United States contributes three-quarters of the NATO budget and the Europeans relatively little remains unresolved.

And what does it look like in the narrower economic area?

The pressure on Europe will continue because its tariffs on industrial goods are higher than the other way around. There is also the problem of digital taxes: an escalation can be expected here if a solution is not found within the OECD framework. The Americans are not just the “bad guys,” but big European countries are targeting the tax base of American tech companies.

What does the election of Biden mean for Swiss companies?

I see the biggest risk with drug prices. However, for many years now, every American president has said that the prices of pharmaceuticals are too high, but nothing really happened. However, if there were a cabinet strongly influenced by the left, appropriate regulations would be conceivable. These would not have to go through the Senate.

How about introducing a “public option”, that is, a state alternative to private health insurance?

In this case, the role of the state in health care would be massively expanded. This would certainly pass in the House of Representatives, but probably not in the Senate. However, the Republican majority is likely to be so small that one or two deviations will suffice.

Is there still the possibility of a free trade agreement with the US under Biden?

No, we can forget that, nothing will change in the next few years. There is no one among the Democrats who defends free trade. Switzerland has excellent contacts with the current government. Relations arose mainly thanks to the American ambassador to Switzerland, Edward McMullen. Foreign Minister Mike Pompeo was in Switzerland for three days last year and only a few hours in Germany. He campaigned for free trade to be negotiated with Bern. We’re going to lose that to President Biden.

Does Biden have ties to Switzerland?

Joe Biden has attended the World Economic Forum twice. He was once received by then-Federal President Johann Schneider-Ammann. Biden’s wife, Jill, was once in Switzerland for two days to learn about the apprenticeship system. He visited the Bühler and ABB companies. You can build on this, but you can expect little more.

Is there a risk of being ridiculed by the United States under Biden as a “currency manipulator”?

If you look at the numbers (current and trade surpluses, interventions in the foreign exchange market), Switzerland meets the US criteria of “currency manipulator”. With the good relationships we have at the moment, that is not a problem.

Why?

The hotline helps us explain this to the major offices in Washington: The US has a huge service balance advantage, high profit distributions flow from Swiss companies to the US, and Swiss companies have many more jobs in the US than the other way around. . So both countries are winners. With Biden as president, I am not overly concerned, but it will be much more difficult to get the Swiss position heard in Washington.

Under Trump, the United States neglected the World Trade Organization (WTO). They sabotaged the arbitration courts, for example. Will this be normalized now?

Here we have to say in favor of the United States: they bear most of the costs of the WTO. At the same time, China has developed great influence in the organization due to the passivity of Europeans in occupying increasingly important positions. Overall, Biden will have warm words for allies in the West, but his administration will focus on domestic politics, that is, health policy, unemployment, and promoting renewable energy. To put it in an exaggerated way: They now campaign nationally for four years until Biden can hand over young Harris.

But if Republicans maintain a majority in the Senate, all of these efforts are doomed.

Yes, that will end Biden’s promise. You want to finance half of the additional expenses with new taxes. There are many things among them that will not please the economy. For example, Biden plans to raise capital gains tax on income of more than $ 1 million from a current high of 20 percent to the level of the income tax rate, which would roughly double. He also wants to raise corporate income taxes, which have fallen to 21 percent under Trump, to 28 percent.

Will Europe get more involved in the conflict between the United States and China?

Biden cannot afford to be left behind here because the old industrial strongholds in the “Rust Belt”, some of which he was able to reclaim, demand resistance from China.

What does that mean for Switzerland?

The motto in trade with China is “free, fair and based on reciprocity.” The West must demand this more and more. It is neither fair nor reciprocal for Chinese companies to be allowed to sell in our markets with government subsidies and without regard to European standards. A President Biden will continue the dispute; maybe he will take Europe with him if he can finally agree on a common position.