Swiss Watch Exports Fell Again in October Amid US Trade Tariffs
(Bloomberg) — Swiss watch exports fell for a third month as US President Donald Trump’s trade tariffs continued to weigh on the industry.
Watch exports fell 4.4% in October from a year earlier to 2.2 billion Swiss francs ($2.7 billion), the Federation of the Swiss Watch Industry said Thursday. Exports to the US — the largest market — slumped 47%. China, though, grew for a second month as exports rose 13%.
Tariffs have been the dominant narrative in the Swiss watch industry since Trump imposed a 39% levy on Switzerland — higher than the European Union and other developed economies — that went into effect on Aug. 7.
Watchmakers and other Swiss exporters finally got some good news last week when the US said it would cut the tariff to 15% — though there is no specific date for the new agreement to take effect.
Many producers had rushed to build up inventory in July to avoid the new levies, which left watchmakers controlled by the likes of Richemont, Swatch Group AG and LVMH, as well as independents including Audemars Piguet, Patek Philippe and Rolex SA, facing diminished margins in their key market.
Manufacturers of watches, machines and precision instruments were among sectors hit hardest by the 39% levy, according to Switzerland’s central bank, but the impact has extended beyond them with Switzerland’s overall exports to the US also retreating in October.
Speaking on the day the tariff reduction was announced, Breitling AG Chief Executive Officer Georges Kern said he welcomed the cut, though he said the industry wanted to see the original levy of 2% reinstated. Swiss-made watches do not compete with domestic production or jeopardize jobs in the US, he added.
“The Swiss watch industry is further an important employer in the US, both for repair services and retail operations,” he said in an interview.
Prices for lower-valued watches rose in October, though that was partially offset by a sharp 7% decline for watches priced at over 3,000 francs, the Federation of the Swiss Watch Industry said.
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