Why geopolitics and intercultural skills are becoming increasingly important

What implications could the return of Donald Trump have for trade and the economies of Europe and Switzerland? 

Donald Trump is widely recognized as a trade protectionist and isolationist, viewing international institutions and alliances as burdens on the United States. He perceives trade and investment treaties as unfavorable agreements that disadvantage the U.S. and exacerbate trade deficits. During his first term, these views were evident in his policies and rhetoric. However, his return to the White House, buoyed by electoral support across multiple demographic groups and the key swing states, signals a renewed mandate for disruption.  

The liberal international order, underpinned by rules and institutions «made in America» such as the United Nations system (established in San Francisco), and the World Bank and IMF (established in Bretton Woods, New Hampshire), is likely to face significant strain. The World Trade Organization (WTO), already weakened during Trump’s first term by his blockade of appellate body judge nominations, is particularly vulnerable. This raises a critical question: what happens if the U.S. retreats further from an order that relied on its leadership?  

Part of the answer lies in Trump’s approach, which tends to be transactional. His announced tariffs—ranging from 10–20% on Europe, compared to 60% or more on China and 25% on Canada and Mexico—indicate a selective withdrawal rather than a complete retreat. While some threats may serve as negotiation tactics, Trump’s history, such as the Sino-American trade war initiated through tariffs on Chinese goods, suggests he is willing to follow through with some maximalist positions. 

Trump’s return could accelerate a transformation in globalization. Major trading economies, including Europe, China, and India, may need to assume greater leadership roles to preserve an open trading system. However, collaboration among these players will be fraught with challenges. Trade constitutes a much smaller share of U.S. GDP than it is for European economies (especially Switzerland) and emerging powers like China and India (see graph). Yet, both China and India are known for being state-dominated economies having protectionist policies, while Europe has recently adopted more interventionist measures, such as the EU’s recent demands for technology transfers from Chinese battery manufacturers. Complicating matters further is the likely pressure from a new Trump administration on its trade partners to limit collaboration with China, intensifying the Sino-American trade war. 

The implications of Trump’s election victory will ripple through global trade and economics, not just in day-to-day operations affecting businesses but in shaping the structural foundations of the global economy for years to come. 

What impact do you anticipate for firms operating across Europe? And what does that mean for Switzerland? 

All the above points underscore significant uncertainties, with both political and economic risks escalating. It is important to remember that the United States accounts for roughly a quarter of all EU exports and for both Switzerland and the EU, the U.S. is their primary export and trade partner (with China closely trailing in the EU’s case). On the import side, a less open international trading system would also disrupt supply chains, affecting sourcing. As a result, we are likely to see an increased focus on geopolitics at the boardroom level—an ongoing trend in recent years. This could drive a deeper push toward reshoring and regionalization, alongside the exploration of new growth markets such as India, China, and emerging economies in Africa. 

Despite these challenges, Switzerland is uniquely well-positioned. It has strong trade and investment agreements with Europe (despite ongoing political issues around establishing a new institutional framework agreement), as well as free trade agreements with China and, via EFTA, with India. This places Switzerland in an enviable position, maintaining strong relationships with all its major trade partners except the United States. 

Even regarding the U.S., Switzerland holds a distinct advantage. It is the seventh largest investor in the U.S., and Swiss investments in that country surpass those made in Germany, France, Italy, and the U.K. combined, according to the Federal Department of Foreign Affairs. These investments support approximately half a million U.S. jobs, giving Switzerland a good negotiating position compared to other European economies. However, the U.S. has recently become Switzerland’s most important export market for goods, a development that has helped mitigate the effects of stagnation in key European markets, particularly Germany, but which means that any U.S. tariffs would have a significant impact on Swiss firms operating in these sectors. 

How can we best prepare our students for these challenges? 

Considering the points discussed above, we need to equip our students with a deeper understanding of geopolitics and the challenges it poses for business. Equally important is a strong focus on emerging growth markets, which are expected to play a crucial role in the coming years, diverging from the traditional dominance of Europe and North America. These include India and China, as well as future growth markets in Africa. To prepare students for the realities of international business over the next few decades, we must foster flexibility and provide a comprehensive understanding of the business environments and challenges in key regions, specifically: The EU, centered on the German economy; North America, anchored by the U.S., and the Indo-Pacific, with a focus on China and India. 

Additionally, we must ensure students are aware of future growth opportunities in Africa, for example, in countries like Nigeria, which already has a population exceeding 200 million and is expected to double in the coming decades. 

This involves not only teaching intercultural competence but also providing in-depth knowledge of the unique business environments in these regions. For instance, markets in India, China, and many African nations differ significantly from those in the EU or the U.S., due to factors such as the prominent role of the state, the influence of family-run conglomerates, institutional weaknesses, and regulatory complexities. At the same time, these markets are highly dynamic and innovative, requiring businesses to adapt at a faster pace than in more traditional markets. 

India and China are at the forefront of digitalization, with their firms demonstrating remarkable entrepreneurial prowess. Moreover, these countries play a pivotal role in global sustainability efforts. Any meaningful progress toward reducing emissions and addressing climate change must include India and China as central players. 

By emphasizing these key markets, we align with core pillars of our business school strategy: entrepreneurship, sustainability, and digitalization. Preparing our students in this way ensures they are well-equipped to navigate the future complexities and opportunities the global economy will offer local and global businesses.