Trump's 39% Swiss tariff - among the highest - gives Alpine country's watches hard time
The Swiss government said it viewed the White House's new tariffs with "great regret."
The Swiss watch industry has been suffering from weak global demand and sales lately. A decision by the Trump administration to impose a 39% tariff on Switzerland may add to its hard time.
More than 90 countries were given new tariffs on Aug. 1 as part of President Donald Trump's drive to reduce the gap between the value of goods the United States buys from other countries and those it sells to them. Trump believes tariffs will boost American manufacturing and protect jobs. Many economists are skeptical it will work.
The Swiss government said it viewed the White House's new tariffs with "great regret." The Swiss Federal Council said it remained in contact with U.S. authorities about the tariffs and "continues to strive for a negotiated solution."
Only Laos and Myanmar (also known as Burma), at 40%, and Syria, at 41%, fared worse than Switzerland in terms of Trump's fresh tariffs on their goods. The Alpine country now has until Aug. 7 to work out a trade deal with the United States or chocolate, jewellery and, yes, watches, will be subject to levies more than double the 15% rate for most European Union imports into the United States. Switzerland's pharmaceuticals sector was not included in the tariffs.
Switzerland shipped about $63 billion of goods to the United States in 2024, according to the office of the United States Trade Representative. That's about one-sixth of its total exports. Going the other way, goods exported from the United States to Switzerland totaled an estimated $25 billion last year, a trade deficit of $38 billion.
The U.S. was Switzerland's top market in 2024 for perhaps its most famous good: timepieces. They accounted for about 17% of exports, or about $5.4 billion, according to Federation of the Swiss Watch Industry.
Still, for the Swiss watch, Trump's 39% tariffs may amount to bad timing.
The industry has struggled with weak demand from China, the Federation of the Swiss Watch Industry says. The trade uncertainty unleashed by Trump's tariffs over the last few months has meanwhile boosted the value of the Swiss franc currency, making the nation's watches more expensive for tourists who buy them while on vacation. Over the last decade, some brands of Swiss watch have also lost out on market share to the Apple Watch.
Overall, Swiss watch exports have been falling. They were down as much as 10% in May.
Financial markets in Switzerland were closed for a national holiday on Aug. 1, giving respite to the shares prices of producers such as Richemont and Swatch Group. But Watches of Switzerland Group, a retailer that sells Rolex and other timepieces in the United Kingdom and the United States, saw its U.K.-listed share prices fall nearly 8%.
Critics of tariffs argue that the additional costs of goods are typically passed to the consumer.
Analysts at Jefferies Global Research and Strategy told Bloomberg that if the 39% tariff goes ahead for Switzerland, it could require price increases in the United States for Swiss watches of more than 20%.