39% Swiss Tariff Slams Watches of Switzerland, Sending Shares Down 6%

Watches of Switzerland Group Plc saw its share value drop sharply, falling by up to 6% in the wake of a major announcement from the US. President Donald Trump has imposed a new 39% tariff on imports from Switzerland, a country renowned for its precision-made goods. This aggressive new tariff, which is among the highest globally, has created significant market turmoil and raised alarm bells throughout the luxury retail sector.
As a prominent seller of luxury Swiss watches in both the US and the UK, Watches of Switzerland found itself on the front lines of this trade war escalation. The company’s stock took the most direct hit from the news, reflecting investor anxiety over how the new duties will impact its American operations and profitability. Meanwhile, other key players like Richemont and Swatch Group AG were temporarily insulated from the fallout due to a public holiday that had closed Swiss financial markets.
The decision to impose the 39% tariff is a major setback for an industry that has already been grappling with a rollercoaster of trade uncertainty. Earlier in the year, a threatened 31% tariff prompted a rush of pre-emptive exports, as retailers and importers tried to beat the deadline. This period of frenzied activity was followed by a slump when it seemed a more favorable deal might be reached, highlighting the volatile nature of the market under the cloud of trade tensions.
The potential ramifications for US consumers are considerable. Experts, including those at Jefferies, warn that the full 39% tariff could necessitate price hikes of over 20% on coveted Swiss timepieces. The one-week delay until implementation, however, is a key detail. Analysts speculate this delay is not a sign of leniency, but a calculated move by the administration to create leverage in ongoing trade negotiations, leaving the ultimate fate of the tariff, and the prices of luxury watches, hanging in the balance.