As a Swiss-based wealth manager focused on U.S. clients, WHVP offers a unique, neutral perspective on the 2024 election’s impact. Our position outside U.S. political pressures lets us provide clear insights into the intersection of politics and wealth, supported by over 30 years of guiding clients through major events like the dot-com bubble, the 2008 crisis, and COVID-19. This was our ninth U.S. presidential election that we observed as a firm. We are here to share our perspective on how a second Trump term could affect fiscal policy, national debt, and the U.S. dollar’s value.

Immediate Market Impact

President Trump’s reelection has quickly sent ripples through global markets, with the U.S. dollar strengthening and the U.S. stock market rallying as investors brace for his pro-business, tax-cutting policies. Trump, alongside the Republican Party, has long positioned himself as a champion of fiscal responsibility, promising to rein in debt and stimulate economic growth. In his victory speech, he hinted at plans to lower the national debt, sparking optimism among market participants who believe a second term could usher in a wave of economic expansion.

Before Trump’s victory was even officially confirmed, the U.S. dollar surged in anticipation of a favorable business environment, while Bitcoin reached new all-time highs, signaling growing demand for assets unlinked to traditional government control. Meanwhile, the Euro came under pressure as global investors flocked to the dollar and Bitcoin, seeking stability amidst shifting economic dynamics.

But the question remains: Can Trump deliver on his promises of fiscal discipline and a reduction in debt? And will the U.S. dollar continue its ascent, or is this rally only temporary? Let’s take a closer look at the broader implications for the U.S. economy and your wealth in the years and decades to come.

Trump’s Fiscal Legacy: A Look Back at the First Term

Before we examine what a second term under Trump might mean for the U.S. economy, it’s essential to understand the fiscal trajectory set during his first term. President Trump’s administration was marked by massive fiscal expansion, with policies that significantly impacted the national debt and the broader economy.

Throughout his four years in office, Trump oversaw a staggering $8.8 trillion in gross new borrowing, offset by just $443 billion in deficit reduction measures. Excluding the bipartisan COVID relief efforts, the debt growth during his term reached an unprecedented $4.8 trillion, signaling a pattern of prioritizing short-term economic stimulus over long-term fiscal health. This approach came at a time when the U.S. government was already on a path of increasing debt, but Trump’s policies certainly accelerated the pace.

Key components of this massive debt accumulation included:

1. The Tax Cuts and Jobs Act of 2017: This landmark tax reform law, which reduced corporate taxes and aimed to spur business investment, added $1.9 trillion to the national debt. While it provided a temporary boost to the economy, the tax cuts failed to produce enough revenue to offset their cost, resulting in a significant increase in the deficit.

2. Bipartisan Budget Acts of 2018 and 2019: These budget agreements, which focused on increasing defense spending and entitlement programs, were responsible for adding another $2.1 trillion in debt. The bills reflected a bipartisan willingness to spend more in certain sectors, further contributing to the fiscal imbalance.

3. COVID-19 Relief: The CARES Act and additional COVID relief measures were perhaps the most significant contributors to Trump’s debt expansion. The government’s emergency response to the pandemic added $3.6 trillion in new borrowing, with the CARES Act alone contributing $1.9 trillion.

4. Executive Actions on Health and Trade: While Trump’s tariff policies provided some savings—$445 billion in the form of tariff revenue—other executive actions on healthcare and prescription drug pricing added additional costs, with the termination of Affordable Care Act cost-sharing reductions alone contributing $250 billion in long-term liabilities.

Despite his administration’s emphasis on reducing the national debt, Trump’s fiscal policies saw a notable contrast to his rhetoric. While the President proposed deficit reductions in his budgets, very few of these were enacted into law. As a result, the total debt burden increased by $7.8 trillion during his term—a development largely driven by the economic stimulus measures he signed into law.

As we now look ahead to what Trump’s second term could bring, it’s crucial to remember the fiscal landscape his first term created. Will his approach to economic stimulus, tax cuts, and government spending shift in a second term? Or will we see more of the same—a continuation of policies that prioritize short-term economic growth over long-term fiscal discipline? Let’s take a deeper dive into what these future possibilities could mean for the U.S. economy and for your wealth.

Short-Term Gains, Long-Term Costs: Trump’s Proposed Economic Policies Revisited

Over recent years, both Republicans and Democrats have endorsed expansive spending, leading to a mounting national debt that’s becoming increasingly costly to manage. Today, the U.S. faces a deficit of 6.3% of GDP, fueled by rising expenditures in defense, social programs, and infrastructure—spending that is expected to continue under Trump’s leadership.

In his new term, Trump’s agenda is likely to build on his previous economic policies, with further tax cuts, increased military spending, and additional tariffs. His plan includes modifying and extending the Tax Cuts and Jobs Act (TCJA), lowering corporate taxes, and eliminating taxes on tip income, overtime pay, and Social Security benefits. While these measures could drive short-term economic activity, they carry substantial fiscal implications.

The nonpartisan Committee for a Responsible Federal Budget estimates that Trump’s policies could add as much as $7.75 trillion to the national debt by 2035 under a central estimate.

In a high-cost scenario, debt could swell by $15.55 trillion, pushing public debt from 102% of GDP today to as high as 161% by 2035—well above historical norms and even wartime peaks.

These policies could bring heightened inflationary pressures and high interest rates. The U.S. dollar’s purchasing power, which has already dropped by nearly half since 2000, could erode further if the Federal Reserve is forced to keep rates high to manage inflation.

Rising debt service costs would also contribute to deficits, potentially consuming budget resources that might otherwise support essential services or investment in growth. Meanwhile, the dollar’s global influence is increasingly in question: the BRICS+ nations, for instance, are exploring ways to reduce reliance on the dollar in trade. If this trend continues, global demand for the dollar could weaken, potentially further reducing its value.

For investors, Trump’s projected policies present a mix of opportunities and risks. While pro-growth tax cuts and fiscal stimulus might drive short-term market gains, the rapid increase in debt combined with structural deficits could undermine long-term stability, placing upward pressure on interest rates, accelerating inflation, and straining the dollar’s global position. Although some cost offsets are proposed, such as new tariffs, reduced regulatory spending, and cuts in the Department of Education, these are unlikely to fully counterbalance the expansive fiscal measures in Trump’s plan.

In short, while the Trump administration’s policies may drive short-term economic growth, they carry significant risks for inflation, interest rates, and the dollar's stability—factors that investors will need to watch closely in the years ahead.

Strategic Diversification through Swiss Offshore Banking

Amid these economic and fiscal uncertainties, global diversification remains a prudent strategy to hedge against U.S. market volatility and currency devaluation. Switzerland, with its centuries-old commitment to financial stability, neutrality, and privacy, offers a safe harbor for wealth preservation.

The Swiss franc’s consistent strength and stability position it as a robust hedge against dollar depreciation. From January 2000 to January 2024, the Swiss franc appreciated nearly 89% against the U.S. dollar, reinforcing its value as a reliable currency in times of dollar instability.

Moreover, with U.S. stock market valuations historically high and global market shifts indicating potential limitations on U.S. growth, diversifying into undervalued international equities, especially in Europe, becomes increasingly appealing. Swiss-managed offshore accounts allow investors to participate in these undervalued opportunities while benefiting from legal structures that enhance privacy and asset protection.

In light of President Trump’s reelection and the anticipated continuation of fiscal expansion, global diversification and Swiss offshore banking offer a strategic foundation for wealth preservation. Holding assets in Switzerland not only provides a hedge against currency fluctuations but also delivers a layer of protection from potential domestic volatility, inflationary pressures, and political shifts. WHVP remains committed to helping U.S. investors navigate these complex times.

Interested in having a chat? Reach out to us via this contact form: