Swiss watch exports plunge on weak China demand, US tariffs

Swiss watch exports tumbled in August as Chinese demand remained weak and stiff U.S. tariffs went into effect. Exports fell about 17% from a year earlier, the Federation of the Swiss Watch Industry said in a statement Thursday. All main markets saw double-digit declines, with China down 36% and the U.S. — the watch industry’s largest market — falling 24%. To an extent, the plunge reflected an expected rebalancing following the high level of exports seen in April and July, ahead of anticipated tariffs, according to the statement. Industry headwinds Still, “the broad-based downturn underscores the formidable headwinds the Swiss watch industry continues to face,” Vontobel analyst Jean-Philippe Bertschy said in a note. “Recent reports from several watch brands suggested pockets of resilient U.S. demand and a tentative stabilization in China. Today’s data, however, largely negate those signals,” he said. The 39% levies the U.S. applied on Switzerland — higher than the European Union and other developed economies — went into effect on August 7 and have shaken the watchmaking industry. Many producers had rushed to build up inventory in the U.S. to avoid tariffs. Creative protest One opted for a creative way to nudge the Swiss government to reach an agreement with the U.S. Swatch Group last week unveiled a special tariff edition priced at 139 Swiss francs ($176) and sold only in Switzerland. On the dial, the numbers three and nine are reversed — a nod to the 39% duty. The model will be pulled from stores once a new deal is struck, according to a spokesperson. Last Friday, U.S. Commerce Secretary Howard Lutnick struck a more positive tone and predicted the U.S. will eventually reach a trade deal with Switzerland. The latest talks were described as “constructive.” By Allegra Catelli

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Swiss watch exports plunge on weak China demand, US tariffs