US Midterms: effects on tariffs, the dollar and markets in Switzerland

Context

TL;DR

• The U.S. election on November 3 may weigh on the Swiss economy.
• In 2025, bilateral trade reached 293 billion.
• Three outcomes concern tariffs, the dollar and financial markets.
• Polymarket estimates a 93% chance for the Democrats in the House.

Key facts

• Date → November 3
• Seats → 435 in the House and 35 of the 100 Senate seats
• Trade 2025 → 293 billion dollars, approximately 243 billion francs
• S&P 500 → always up over the 100 days; average gain of 10% over 75 years
• Polymarket, House → 93% for a Democratic victory
• Polymarket, Senate → approximately 65% for a Democratic victory
• Reuters/Ipsos → 44% Democrats and 37% Republicans among registered voters

On November 3, the United States will renew Congress. Midterm elections concern not only Donald Trump's political future: they can also affect the Swiss economy through tariffs, the dollar and financial markets. The trade relationship is significant: in 2025, the total value of trade in goods and services between the two countries was 293 billion dollars, equivalent to approximately 243 billion francs.

Three political scenarios

The election will fill all 435 seats in the House of Representatives; in the Senate, 35 of 100 seats will be up for election. The first possibility is a Democratic victory in both chambers, with the president's room for maneuver severely limited. The second scenario sees the Democrats prevail in the House, while the Republicans retain control of the Senate. The third is the Republican majority being maintained, which would make it easier for Trump to pursue his economic agenda.

According to J. Safra Sarasin, a double Democratic majority could favor a “selective de-escalation” of trade tensions with allies. Trump would nevertheless retain the power to block measures with a veto and issue executive orders.

Tariffs and exchange rates

For Swiss companies, the most delicate issue is US tariffs. Santosh Brivio, an economist at Banca Migros, observes: “Tariffs are certainly no postcards bearing friendly greetings.” The barriers make exports more expensive and complicate planning, especially in pharmaceuticals, machinery manufacturing and watchmaking. If Congress were divided, existing tariffs would probably remain, while new measures would be more difficult; with a confirmed Republican majority, trade tensions could increase.

Lombard Odier believes that a gridlocked Congress could limit US public spending, lower interest rates and weaken the dollar, although less pressure on the US central bank could increase confidence in the currency. With a weak dollar, travel and purchases in the United States would cost Swiss consumers less; for exporters, revenues would generally be lower after conversion into francs. Clientis finally notes that, in the short term, fuel and heating will depend mainly on geopolitical tensions and oil. To track the exchange rate, comparatore CHF/EUR can be viewed alongside the data.

Operational details

Different effects on the Swiss budget

The American vote does not have just one effect on the Swiss budget. The same political configuration can affect an exporting company, a family that makes purchases in the United States and anyone observing the financial markets differently. To assess the impact, it is useful to separate trade, exchange rates and investments.

Three channels, three readings

For a Swiss company selling in the United States, tariffs and exchange rates must be considered together: tariffs raise the cost of exports and make planning more complex, while a weak dollar can reduce revenues once converted into francs. Pharmaceuticals, the machinery industry and watchmaking are the sectors identified as particularly exposed.

For consumers, the relationship is reversed. A weak dollar makes travel and purchases in the United States less expensive, but it does not provide a general explanation for every energy expense: according to Clientis, in the short term, fuel and heating are affected above all by geopolitical tensions and oil prices. Anyone following costo della vita in Svizzera should therefore distinguish between consumption linked to exchange rates and prices linked to energy.

On the investment front, Thomas Gitzel, chief economist at VP Bank, points out that for stock markets it is not decisive who gains or loses how many seats. Over the past 75 years, the S&P 500 index has gained ground in every 100-day window following midterm elections, with an average rise of 10%. History calls for caution: over the long term, corporate earnings, inflation and central-bank decisions matter. A highly contested result can also increase political tensions and volatility, especially after accusations of possible electoral fraud, unsupported by evidence, repeated by Trump.

Useful tools to protect your net income

To reduce FX leakage, compare CHF-EUR exchange options and banks for cross-border workers.

Key points

A practical check after the vote

For those who live or work in Switzerland, the most concrete approach is to turn the date of November 3 into an orderly check. There is no need to anticipate the outcome: the consultation presents three configurations and different channels for trade, foreign exchange and markets. The following sequence separates the steps without adding forecasts.

Five steps

1. Mark the date and the two chambers. On November 3, all 435 House seats and 35 of the 100 Senate seats are up for election. For the Senate, consider the results in individual states, described as decisive for the majority.

2. Classify the result. Use the three configurations described: Democrats in both chambers, a divided Congress or a confirmed Republican majority. This distinction serves to interpret tariffs and the economic agenda differently.

3. Check trade exposure. If a Swiss business sells in the United States, check whether it operates in the sectors mentioned: pharmaceuticals, machinery or watchmaking. With a divided Congress, distinguish existing tariffs from the possibility of new measures; with a confirmed Republican majority, consider the possibility of further escalation.

4. If you have expenses in the United States, observe the dollar-franc exchange rate. A weak dollar makes travel and purchases less expensive; for an exporter, however, it can reduce revenue after conversion into francs. For foreign exchange, comparatore CHF/EUR can be used.

5. Keep energy and markets separate. For fuel and heating, look first at geopolitical tensions and the trend in oil prices. For investments, consider the 100 days following the vote without stopping at the result alone: over the long term, earnings, inflation and central-bank decisions matter. A contested outcome can increase tensions and volatility.

The final check

After placing the result in one of the three scenarios, do not automatically combine the dollar, energy and stock market into a single signal. Lombard Odier's indications on foreign exchange, Clientis's on fuel and heating, and VP Bank's reading of the markets concern distinct channels. Separating them avoids using the movement of a single item as a measure of the entire Swiss economy.

To turn the analysis of exchange rates and expenses into a personal check of disposable income, use calcolatore stipendio.

Source: tio.ch