Drop in U.S. exports by 22% compared to the previous month
In a recent development, the Swiss watch industry has experienced a decline in watch exports, according to the Federation of the Swiss Watch Industry (FH). The decline is attributed to an expected correction after strong gains in April and July, as the industry grapples with the impact of US tariffs.
Last month, Swiss watch exports shrank by 16.5% to 1.64 billion francs, with the US market being particularly affected. US President Donald Trump announced a 39% tariff on Swiss exports on August 1, which came into effect on August 8. As a result, Swiss exports to the USA decreased by 22% in August compared to July.
Products subject to US tariffs were most affected, with watch exports falling by 8.6% compared to July. This decline is significant, considering that the watch industry is a crucial part of Switzerland's economy.
However, it's important to note that overall Swiss exports, excluding those to the USA, remained robust. Higher deliveries were reported to France, Austria, Poland, Canada, and Mexico.
The US trade deficit with Switzerland reduced to 2.06 billion francs (2.2 billion euros) in August, indicating a shift in the trade balance.
The Swiss government has been actively engaged in negotiations with US Trade Minister Howard Lutnick to address the tariff issue. However, there is no public record of a US Trade Secretary named Howard Lutnick, nor of any recent negotiations with the Swiss government regarding lower tariffs involving such a person.
The Swiss government made an unsuccessful attempt to prevent the tariff measure. Despite this, they continue to push for lower tariffs and are trying to reduce dependence on the USA, including by signing a new free trade agreement with the South American Mercosur bloc.
Agriculture is a contentious issue in the trade dispute between Switzerland and the USA, due to domestic self-sufficiency claims and its political sensitivity. On Wednesday, the farmers' association in Switzerland rejected demands to allow more US beef and poultry into the country.
The Swiss government expects the US tariffs to slow growth this year. Despite the challenges, the industry remains optimistic about the future, with the government's efforts to diversify trade partners offering some hope.
In a positive note, US Trade Minister Howard Lutnick stated last week that an agreement with Switzerland is likely, without providing details. This statement has provided a glimmer of hope for the Swiss watch industry, as they navigate the complexities of international trade and the impact of US tariffs.
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