Switzerland and its hidden champions from the middle class are paying a high price for Trump’s new protectionism. Globalized large corporations are proving to be adaptable.
December 31, 2025, 10:23 p.mDecember 31, 2025, 10:23 p.m
Daniel Zulauf / ch media
An extremely turbulent stock market year also ended on a happy note in Switzerland. The Swiss Market Index (SMI) of the 20 most valuable companies achieved an annual performance of a good 14 percent, which does not even include the substantial dividends. The Swiss Leader Index (SLI), which is somewhat broader with 32 companies, ended the year almost 12 percent higher. However, the gap to the SMI is solely due to the construction of the SLI.
Donald Trump also dominated global stock market events in 2025.Image: keystone
Whether SLI or SMI, no one could have expected such a performance after Donald Trump’s first tariff hammer in April 2025. The incomprehensible mixture of arbitrariness and calculation with which the US President imposed his customs regime on the world hit Switzerland particularly hard. Unfortunately, people in this country believed they were in relative safety until April 2nd. What happened next was a political horror trip.
In the pharmaceutical industry, initially spared from the tariff hammer, the big tremors suddenly broke out. The watch industry, which has long been struggling with sales problems in China, suddenly found itself confronted with a problem in its most recently fastest-growing US market that 20 years ago in the Middle Kingdom was called the “luxury tax”.
The mechanical, electrical and metal industries, which have been living successfully with the strong franc for decades and are masters of precise calculations, were overnight faced with a task that they were no longer able to solve themselves.
Although the Swiss economy has no longer been plagued by US import tariffs since mid-November, which are more than twice as high as those of the EU and other important industrialized countries, the chaotic summer months have left their mark. These traces are clearly visible beneath the smooth surface of the Swiss Performance Index (SPI), which represents all 206 Swiss stocks listed on the local stock exchange.
Attack on the substance
Although the index gained almost 18 percent over the course of the year (including dividends), there were 88 losing stocks for every 118 winning stocks. The ratio of 0.75 losers per winner is bad, especially when compared to stocks from large companies. In the SLI index, there were 23 winning stocks and only 9 losers. The comparatively poor performance of the overall market is a clear sign that Trump’s customs policy, the associated economic problems and the generally unstable geopolitical climate are deeply damaging the substance of the Swiss economy.
Image: SLI/let
The losers from protectionism and the ongoing fragmentation of the global economy are obviously much less the globalized large corporations than the numerous medium-sized companies. Although they were able to operate very successfully in niche markets worldwide in the past, they now have to pay the toll for their strong domestic production base.
It was hardly a coincidence that among the best stock market performers last year were the shares of companies that had split up in their recent history. A prime example is the cement company Holcim. In the performance ranking of the 32 largest Swiss companies, Holcim stocks are clearly ahead with a price gain of over 70 percent (see table). This could not necessarily be expected, especially since the North American business, which was spun off in June under the name Amrize, was considered to be particularly promising for growth.
Holcim today, UBS tomorrow?
But investors have now obviously changed their minds. You can see the great opportunities in South America and Asia and there is even optimism for Europe, although the tightening of the European CO emissions regime from next year does not necessarily mean that this would be the case. But the shortage of emission certificates that will begin in January, which cement manufacturers previously received free of charge and were able to sell profitably on the market, creates opportunities for price increases. Some analysts believe that Holcim could benefit more from price increases in Europe than the company has to pay for the additional costs of greenhouse gas emissions.
Donald Trump also dominated global stock market events in 2025.Image: keystone
The example shows: In the current environment, large global companies have room for maneuver that they can exploit to the benefit of their shareholders. The Galderma Group, which specializes in beauty medicine and skin care, is also a split product. He belonged to Nestlé until 2014. The company was then sold to the Swedish financial investor EQT and the shares have been shining on the Swiss stock exchange since March 2024. Through the IPO, Galderma gained entrepreneurial freedom that the company was not able to develop within the Nestlé Group. The same is happening to the drug manufacturer Sandoz, which has been getting better and better since it was spun off from Novartis in October 2023.
It is quite possible that the trend towards splitting up large companies will continue. SVP doyen Christoph Blocher recently discussed this path for UBS. Blocher believes that by spinning off its US business, the bank would not only reduce its risks and solve its equity problem, but also create added value for investors. UBS management, which wants to expand significantly in the USA in order to finally raise the profitability of its business there to group level, warns that Blocher’s plan would lead to a “massive loss of value for all UBS stakeholders”.
However, recent experience with spinoffs points in the opposite direction, according to the formula: 1 minus 1 equals more than zero.
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