Watches of Switzerland Group Plc is feeling the sting of a new trade measure, with its shares tumbling by as much as 6% following US President Donald Trump’s announcement of a 39% tariff on Swiss imports. The retailer, which is a major seller of luxury Swiss watches in both the UK and the US, is at the epicenter of this financial disruption, which has been described as one of the steepest tariff rates globally.
The company’s stock was a bellwether for the market’s reaction, reflecting the immediate investor concerns about the tariff’s impact on its American business. The sheer scale of the new duty poses a significant threat to profitability and sales in the US, a key growth market for the firm. In a curious twist of fate, the timing of the announcement coincided with a Swiss public holiday, which meant that major producers like Richemont and Swatch Group AG were temporarily insulated from the market turbulence.
This new tariff is the latest chapter in a tumultuous period for the Swiss watch industry. Earlier, a threatened 31% tariff had caused a notable surge in exports as importers raced to build up stock before the potential duties took hold. This was followed by a cooling off period when hopes for a more diplomatic solution had eased tensions. The new 39% rate, however, is a clear signal that the trade war is escalating.
If this new tariff is fully implemented, the consequences for American consumers could be severe. According to Jefferies analysts, the tariff could force a price increase of more than 20% on Swiss watches. The market’s anxiety is further compounded by broader concerns about a growing “luxury fatigue” among consumers, as noted by analyst Jean-Philippe Bertschy. The fact that the tariff’s implementation is delayed by one week, however, suggests it may be a strategic negotiating tactic rather than a final policy.
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