President Donald Trump proposed one of the world’s steepest tariffs on Switzerland late Thursday in a move that could see the price of luxury goods from the country, as well as precision instruments and medical devices, skyrocket if the two countries don’t reach a deal by Thursday.
A tray of Rolex watches are seen on a dealer’s stand at the London Watch Show on March 19, 2022.
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Key Takeaways
- Trump threatened Switzerland with a 31% levy in the spring that Swiss leaders were already calling “incomprehensible” before he raised the tariff to 39%, one of the highest in the world.
- Switzerland exported almost $61 billion in goods to the U.S. last year—about one sixth of its total exports.
- Two of the largest imports from Switzerland, gold and pharmaceuticals, are thought to be excluded from the new tariff but other items like luxury jewelry, coffee capsules, Swiss chocolate and precision instruments are subject to the levy.
- Switzerland is home to the world’s finest watch makers—like Rolex, Patek Philippe, Omega, TAG Heuer and Audemars Piguet—as well as the Lindt chocolate company, Nestle’s Nespresso coffee, precision instrument maker Mettler Toledo and medical device manufacturers Alcon and Sonova.
- Most Swiss watch companies are not publicly traded but Rolex reseller Watches of Switzerland Group, which is listed on the London stock exchange, saw shares fall more than 9% on the news.
- Richemont, which owns watch brands Jaeger-LeCoultre and Cartier, among others, was down 3% late Friday morning and Swatch, the parent company of Omega and Longines, also dipped slightly.
What To Watch For
If the rate sticks. The tariff could still be negotiated down before Trump’s Aug. 7 deadline, and the deadline could be extended as Trump has done before. The European Union negotiated a 15% tariff and British goods are subject to a 10% levy.
Key Background
Trump rolled out a broad package of tariffs via an executive order in April on what he called “Liberation Day.” He imposed a 10% baseline tariff on imports from almost every country and said country-specific tariff rates would go into effect April 9. Following a global market crash, however, he suspended the April 9 implementation date and individual negotiations began. Deals with trade partners like the United Kingdom, South Korea, Japan and European Union have been solidified and Trump late Thursday re-issued a list of country-specific tariffs now scheduled to start Aug. 7. The highest proposed rates were slapped on Syria (41%), Laos (40%) and Myanmar (40%), followed by Switzerland, Iraq (35%) and Serbia (35%).
Big Number
14%. That’s how much the price of a yellow gold Rolex Daytona has already increased for American buyers since 2024, the Wall Street Journal reported, and they could get much more expensive under the proposed levy.
Tangent
The U.S. is Switzerland’s top foreign watch market and exports to America have grown 14% each year since 2019, according to the Journal, three times faster than the worldwide average. American collectors are younger than their global counterparts and more interested in expensive models—particurly those made by Rolex, Patek Philippe and Audemars Piguet.
In April, when Trump first announced the impending tariffs, Swiss watch exports surged 18.2% and shipments to the United States rose 149%, according to the Federation of the Swiss Watch Industry. Exports have fallen every month since, dropping 9.5% in May and 5.6% in June, the latest data available.
