Exchange rates are typically hard to forecast, and all the more so in the scenario of a global trade war. For the Swiss franc, which is traditionally seen as a safe haven, the risk assessment of investors would be particularly important. Would our currency be sought as a safe haven in the event of a trade war? Or would it even come under downward pressure given that Switzerland, as a small open economy, would face particularly strong exposure to a severe contraction in world trade? Chart 5 shows that the marked increase in uncertainty relating to trade policy has so far not had any lasting influence on the Page 5/9  value of the Swiss franc. However, it could be a different picture if there were to be a trade war. The lessons learned from the Great Depression show that a trade war may be followed by a currency war. If many countries deliberately weaken their currency to support their own export sector, the consequences for the global economy are severe. Being aware of this, central banks have in recent years consistently refrained from engaging in competitive devaluations. However, it is difficult to predict how they would behave in the event of a fullyfledged trade war. I have mentioned only a few of the factors that are relevant for a central bank’s immediate monetary policy response to an upsurge in protectionism. They all demonstrate that an upsurge in protectionism first and foremost fuels uncertainty.
There is no escaping the reality of this ongoing structural change if a country wants to maintain its competitiveness over the long term. There have also been increasing calls of late for free trade to be curbed because it is not ‘fair’ for certain countries. In this context, the concept of ‘fairness’ is applied in entirely different ways. It is used in assessing bilateral trading relationships, for example, or in connection with alleged violations of existing trade rules. I would like to briefly address both these aspects. It seems rather odd to insist that trade between two countries can only be regarded as fair if the bilateral balance of trade is in equilibrium. Trade between the actors in these countries is voluntary, and therefore only takes place if all of the participants stand to benefit from the exchange. Such trade is not a zero-sum game in which one side’s gain is the other side’s loss. The view that the trade balance between two countries should be in equilibrium ignores both the reality of global value chains and also the very essence of specialisation. Today semifinished products and intermediate inputs can move back and forward across national borders 3 4  Cf. Autor et al. (2016), for example. Cf. World Trade Organization (2017), for example. Page 3/9  many times before the end product is complete. Simply netting bilateral trade flows is no basis for judging whether trade is fair or not.