President Trump’s plan to impose a 39% duty on all imports from Switzerland is causing widespread concern in the Swiss watch business.
The new rate on Swiss imports is higher than the 31% “reciprocal tariff” Trump had threatened in April. It also ranks as one of the highest rates in the world. (A full list can be seen here.)
Last night, the White House said its new tariffs, including the increased duties on imports from Switzerland and India, will take effect Aug. 7—rather than today, as Trump originally announced.
The United States is the world’s largest buyer of Swiss timepieces, and watchmakers warned that high tariffs could spark a steep loss of business and possibly jobs. Leading Swiss brands like Rolex have already hiked prices in response to the current 10% tariffs.
“The U.S. is our biggest market these days,” Rolf Studer, co-CEO of Oris, told Hodinkee. “A 10% tariff we could handle, but 39% is prohibitive. It means you are locking large parts of the Swiss industry out of the U.S.”
The announcement sent shares of Watches of Switzerland down nearly 9% at press time.
The New York Times reported that Switzerland was “shocked” by the new rate, but officials hoped they could use the next week to head it off.
Stefan Legge, head of tax and trade policy at Switzerland’s Institute for Law and Economics, told the Times that while a new trade agreement could come soon, it’s also possible talks between the two sides will drag on.
“One thing we have learned in Switzerland is that you can talk to anyone in the White House administration and it is completely irrelevant if Trump is not on board,” Legge said. “Trump very much enjoys this. He’s at the center of decisions, he wants to stay in demand, and by keeping everyone on edge that will continue.”
(Photo: Getty Images)
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