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Watches of Switzerland's shares fall 6% after Donald Trump slaps 39% tariff
Financial markets in Switzerland were closed for a holiday, initially sparing listed producers such as Richemont and Swatch Group AG.
Shares of Watches of Switzerland Group Plc fell as much as 6% after US President Donald Trump imposed a 39% 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 UK and the US, bore the brunt of the latest tariff salvo. Financial markets in Switzerland were closed for a holiday, initially sparing listed producers such as Richemont and Swatch Group AG.
Swiss watch exports had already been hit in advance of the latest news, surging in the spring when Trump threatened a 31% 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% tariff goes ahead, it could require price increases of more than 20% in the US, according to Jefferies analysts led by James Grzinic. There’s also a possibility that the tariffs don’t go into effect.
“The one-week hiatus until implementation suggests this could be a negotiating tactic,” he said in a note.
Swiss watch exports dropped by almost 10% in May led by a slump in shipments to the US.
“The rise of ‘luxury fatigue,’ a declining ‘feel-good factor’ from luxury purchases, and worsening consumer sentiment all contribute to a less optimistic outlook,” Vontobel analyst Jean-Philippe Bertschy said in a note last month.
