‘He likes Swiss watches’: Trump shocks world of horology with tariffs
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The administration’s 39 per cent tariff on all Swiss imports would likely lead to retail-price increases of 12 to 14 per cent.
PHOTO: AFP
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The Trump administration jolted Switzerland with punitive new tariffs on Aug 1. Few seemed to be more taken aback than buyers and sellers of Swiss watches.
Mr Oliver R. Muller, a luxury watch consultant based in Switzerland, was indignant at the blow that tariffs will likely inflict on the country’s watch industry, which has recently been relying on demand from the United States to offset fading sales in China.
“It’s another burden that comes on top of many others,” he said in an interview.
The administration’s 39 per cent tariff on all Swiss imports,
Shares of Watches of Switzerland Group fell by as much as 6 per cent after US President Donald Trump imposed a 39 per cent tariff on imports from Switzerland, one of the steepest rates globally in his escalating trade war.
The retailer, which sells Rolex and other Swiss timepieces in the United Kingdom and the US, bore the brunt of the latest tariff salvo. Financial markets in Switzerland were closed for a holiday on Aug 1, initially sparing listed producers such as Richemont and Swatch Group.
Swiss watch exports had already been hit in advance of the latest news, surging in the spring when Mr Trump threatened a 31 per cent levy as importers in other markets tried to get in ahead of the tariffs, then easing on hopes of a settlement at a lower rate.
If the 39 per cent tariff goes ahead, it could require price increases of more than 20 per cent in the US, according to Jefferies analysts led by Mr James Grzinic. There is also a possibility that the tariffs do not go into effect.
“The one-week hiatus until implementation suggests this could be a negotiating tactic,” he said in a note.
Swiss watches are a longstanding signal of affluence, and over the years, Mr Trump has been seen wearing various high-end timepieces, including a Rolex. Members of his family and his administration have also sported Swiss watches in public. For observers, that made the 39 per cent levy all the more vexing.
“On top of it all, he likes Swiss watches,” Mr Muller said.
High-end watches have been drawing a growing American fan base in recent years, with obsessive owners showing off their collections on social media.
The chain retailer Watches of Switzerland, which has locations in tony shopping areas across the US, said in a statement that it would “continue to work closely with our brand partners to mitigate any potential impact”.
Trump administration officials did not seem to be focused on watches when they put the tariffs in place, instead citing pharmaceuticals as a driving force in the trade imbalance between the countries. The US has no large luxury-watch-making industry of its own.
Online watch enthusiasts have long clocked the make and reference numbers of the high-end watches of Trump officials. Federal Bureau of Investigation director Kash Patel has been spotted wearing a Breitling. Former department of government efficiency (Doge) czar Elon Musk has a Tag Heuer with the SpaceX logo.
Secretary of State Marco Rubio – who in a previous political life declared that Mr Trump, had he not inherited a fortune from his father, would be “selling watches in Manhattan” – has worn a Rolex, too.
There were already warning signs in the Swiss watch industry before Mr Trump’s tariffs. Exports fell 5.6 per cent in June compared with a year earlier, according to the Federation of the Swiss Watch Industry, a trade group.
That was driven by “significant declines” in sales in the US, Japan and Hong Kong, the group said in a monthly report.
Mr Trump lent his name and signature to a line of Maga (Make America Great Again)-coded timepieces last year, including a US$100,000 “Swiss-made” Tourbillon.
The makers of the watch, a firm registered as TheBestWatchesonEarth, did not respond to a request for comment sent through an intermediary. The site states that the watches “are not political and have nothing to do with any political campaign”. BLOOMBERG
