Swiss Watchmakers Count Cost of 31% Tariff

(IDEX Online) - Swiss watchmakers, already suffering a "marked slowdown in an uncertain climate" are now counting the cost of President Trump's 31 per cent tariffs on exports to the US.

Almost one in six Swiss watches is exported to the US (market share in February was 17.2 per cent according to the Federation of the Swiss Watch Industry Exports (FHS).

But the "Liberation Day" announcement means watchmakers will be forced to see the price of their goods rise by almost a third - a $5,000 watch will now sell for $6,550 - or absorb some or all the cost themselves to remain competitive.

The US's 31 per cent tariff is based its calculation that Switzerland exported goods worth CHF 63.4bn ($70.7bn) last year. Subtract US exports and the deficit is CHF 38.5bn($34.6bn) or 62 per cent. The US has imposed reciprocal tariffs of half the tariffs paid by its exporters to all trading partners.

Global brands like Rolex, Audemars Piguet, Omega, Cartier and Patek Philippe don't like their watches selling for different prices I different countries, so there is speculation that prices could be hiked globally in response to the tariffs.

"We cannot make Swiss watches in the US," said Rolf Studer, the co-CEO of Swiss brand Oris, ahead of Trump's tariff announcement.

"Value creation is in the distribution, in the retailing alone, and if you would tax our products, then that would affect that value creation from a US point of view in their home market."

Swiss watches sales are already in long-term decline. Exports slumped in February, down 8.2 per cent overall, with sales in China down by 25 per cent and the US down by 6.7 per cent.