UBS Predicts Swiss Economic Stagnation Amid US Tariffs Impact

UBS analysts see further upside potential for technology stocks amid a recent rebound, driven by reasonable valuations and ongoing recovery prospects in quality AI companies, though risks persist due to uncertainty over the US trade policy, potential semiconductor tariffs, and changes to AI diffusion rules. Meanwhile, major banks including Goldman Sachs and JPMorgan have raised their forecasts for China's 2025 economic growth, now expecting growth of 4.6% or higher, buoyed by a tariff truce with the US that may help avoid export contractions. However, UBS economists caution that the Swiss economy is expected to stagnate this year and next, attributing the slowdown primarily to US President Donald Trump's broad tariffs that have disrupted global trade, with growth projections of just 1% for 2025 and 1.2% for 2026, well below historical trends. Although a global recession is not anticipated, the tariffs have led to concerns among Swiss companies, with about 70% expecting negative impacts and considering passing customs costs to prices or implementing efficiency savings. Overall, these developments highlight the complex interplay between trade policies and global economic performance, especially in technology sectors and export-driven economies.