WEF attendees answer: Who’s afraid of Donald Trump?

“Handelszeitung” collected voices and impressions on podiums and in one-on-one meetings. Almost no one wants to be mentioned by name. But here’s the bottom line: Trump’s re-election is not a disaster for companies.

Kelleher hopes for normalcy

“We must not forget that Trump’s first term in office was good for the economy,” the head of a European pharmaceutical company tells “Handelszeitung”. And from his conversations with US business executives, he hears that they are slowly getting used to the idea of ​​Trump getting a second term in office. Corporate bosses claim that Trump likes to think of himself as a successful entrepreneur and sides with big business rather than Democrats when it comes to regulation and taxes.

UBS Chairman Colm Kelleher flirted at a side event when asked his opinion on Trump’s possible re-election: “I’m just a humble banker.” UBS would be particularly vulnerable if Trump escalates tensions between the U.S. and China: U.S. companies contribute about 50 percent of assets under management in UBS’ wealth management, and China and Asia are important growth markets.

Trump’s name never comes out of Kelleher’s mouth. But he hopes that trade relations between the two superpowers will not worsen with the next US elections; After all, trade volume is very important for both of them. He expects restrictions to be limited to “hotspots like technology and defence”: “The rest of the stuff needs to continue operating normally.”

Many people hope the situation won’t be that bad. Example: Inflation Reduction Act (IRA): As it is known, Trump wants to cut the Biden government’s billion-dollar program to establish clean industry. But a senior banker said in an interview that Trump will likely offer something similar because the legislative package has been a huge success. Since many companies have set up factories in Republican-run states thanks to the IRA, Trump is likely to face resistance from his own ranks if he has plans to reduce the number.

Trump is a risk for Europe

Sam Altman is also among the optimists. “I believe America will do well no matter what happens in this election,” the founder and boss of Open AI, the parent company of artificial intelligence solution Chat GPT, said in a speech on “Bloomberg House” on Tuesday. Yes, there’s a lot at stake in the election, Altman says, but he didn’t seem too worried. Especially since the issue of regulating artificial intelligence has not yet been raised in the US election campaign.

Not everyone is this comfortable. Western governments and central banks are apparently worried about Joe Biden’s poor poll results compared to potential rival Trump. The US capital market, which is vital for corporate survival, America’s technological dominance and common defense interests: all this becomes a risk with Trump’s possible re-election.

Christine Lagarde is clearly disgusted by the idea of ​​Trump being elected. The President of the European Central Bank made this clear during a discussion on the sidelines of the WEF on Wednesday morning. The Frenchwoman said that yes, everyone is “worried” about possible re-election. The ECB would already be working on relevant scenarios. However, Lagarde did not explain what consequences the Trump election would have in terms of key interest rates.

Lagarde even openly called Trump’s re-election a “threat” to Europe on French television. The ECB president did not have such strong words in Davos, but Lagarde made a strong call for Europe to come closer together. For example, there is still a lack of a unified capital market. This leads to companies refinancing themselves through the major US capital market. For example, German industrial giant Linde gave up its listing in Frankfurt and was listed on the stock exchange in New York.

Ukraine may lose, China may benefit

The biggest unknown is what economic damage Trump’s foreign policy may cause. This seems to be a problem especially for Europe. Although the arms export ban to Ukraine was lifted during the Trump administration, a possible re-election is a black box for Ukraine’s future. He wants to drastically reduce aid to Ukraine, if not cancel it completely. Without US military and financial assistance, it will be extremely difficult for Ukraine to keep the Russian aggressor in check. Ukraine could fall and this could have unpredictable consequences for the security of Europe.

Philipp Hildebrand, a Blackrock executive and former head of the Swiss National Bank, sees Trump’s potential election as “a wake-up call for Europe.” If relations with Washington become difficult again, Europe will have to finally become independent from other partners in the areas of defense, financial markets and technology, Hildebrand said in an interview with media representatives.

“Europe is not at all prepared for the consequences of the Trump election,” the top executive of a large German industrial group contradicts in an interview with “Handelszeitung”. Politics will likely be overwhelmed. On the other hand, companies would adapt quickly. To avoid trade conflicts, companies will likely produce more locally; for example, in the USA for Americans and in China for Chinese. First of all, the industrial manager expects new alliances: “If the US leaves the Europeans in the lurch, then Europe will have no choice and will move closer to China.”

Trump’s former confidant warned in Davos

As an entrepreneur, can you get used to the idea of ​​a new President Trump? “Absolutely not,” warned Trump’s former confidant Anthony Scaramucci, known around the world for his ten-day career as his spokesman, in Davos.

Scaramucci told the US newspaper Politico that Trump has clearly said that he wants to become a dictator and expand the powers of the government. If he returned to the White House, there was the risk of nepotism, the unpredictability of the legal situation, and the risk of America moving towards autocracy: “In principle, business leaders agreed with Mussolini. And they generally agreed with Hitler.” But this only works until “everything goes crazy.”