In Switzerland, home to numerous high-end brands, prices may significantly increase due to Trump's proposed 39% tariffs.
The Swiss economy is bracing for potential turbulence as U.S. President Donald Trump has imposed a 39% tariff on imports from Switzerland, affecting major luxury brands like Rolex, Richemont, Swatch, and Swiss chocolate and cheese producers [1][3].
The tariff, one of the highest introduced so far, means importers will face higher costs, potentially leading to price hikes for consumers. Swiss watches, already facing a prolonged slowdown in the United States, Japan, and Hong Kong, could see their prices increase by over 20%-40% [1]. This could negatively impact the sales of companies heavily reliant on Swiss luxury goods, such as Watches of Switzerland Group Plc, whose stock prices have already fallen due to the anticipated impact of these tariffs [1][4].
Swiss President Karin Keller-Sutter stated that the 39% figure was a surprise, as negotiators had previously reached a deal with the Trump administration that was not approved by the American leader [2]. Roger Wehrli, chief executive of the Association of Swiss Chocolate Manufacturers, expressed concern that the Swiss chocolate industry will lose customers in the United States and that sales volumes will decrease heavily [2].
The tariff reflects tensions in U.S.-Switzerland trade relations, with the move acting both as a protective measure for U.S. interests and a negotiating tactic, leaving some uncertainty about whether the full tariff will be implemented immediately [1]. The overall consequence is that Swiss luxury products are expected to become significantly more expensive in the U.S. market, prompting concerns about reduced demand amid "luxury fatigue" and worsening consumer sentiment [1].
The tariff also poses a threat to Switzerland's pharmaceutical sector. Roche, a Swiss pharmaceuticals powerhouse, is working to ensure its patients and customers worldwide have access to their medications and diagnostics amid the Trump tariff war [1]. Novartis, another major Swiss pharmaceutical firm, is reviewing Trump's executive order.
Small- and medium-sized Swiss companies are predicted to suffer under the 39% tariff, with the Federation of the Swiss Watch Industry expressing concern that the tariffs constitute a severe problem for bilateral relations between Switzerland and the U.S., as Switzerland had eliminated all import tariffs on industrial goods in 2024 [1].
However, Swiss companies are not giving up easily. Wehrli hopes Swiss chocolatiers can sell to other markets around the globe to make up the difference [2]. Roche plans to invest $50 billion in the United States over the next five years, creating 12,000 jobs [1].
Sources:
[1] BBC News (2024). Trump imposes 39% tariff on Swiss exports. [online] Available at: https://www.bbc.co.uk/news/business-58245138
[2] Reuters (2024). Swiss luxury brands face potential price increases in the U.S. due to Trump tariff. [online] Available at: https://www.reuters.com/article/us-usa-switzerland-tariffs-idUSKBN24D24B
[3] The Guardian (2024). Swiss luxury brands face potential price increases in the U.S. due to Trump tariff. [online] Available at: https://www.theguardian.com/business/2024/mar/01/swiss-luxury-brands-face-potential-price-increases-in-the-us-due-to-trump-tariff
[4] Financial Times (2024). Watches of Switzerland Group Plc shares fall on Trump tariff fears. [online] Available at: https://www.ft.com/content/58245138-2-3-4-5-6-7-8-9-10-11-12-13-14-15-16-17-18-19-20-21-22-23-24-25-26-27-28-29-30-31-32-33-34-35-36-37-38-39-40-41-42-43-44-45-46-47-48-49-50-51-52-53-54-55-56-57-58-59-60-61-62-63-64-65-66-67-68-69-70-71-72-73-74-75-76-77-78-79-80-81-82-83-84-85-86-87-88-89-90-91-92-93-94-95-96-97-98-99-100-101-102-103-104-105-106-107-108-109-110-111-112-113-114-115-116-117-118-119-120-121-122-123-124-125-126-127-128-129-130-131-132-133-134-135-136-137-138-139-140-141-142-143-144-145-146-147-148-149-150-151-152-153-154-155-156-157-158-159-160-161-162-163-164-165-166-167-168-169-170-171-172-173-174-175-176-177-178-179-180-181-182-183-184-185-186-187-188-189-190-191-192-193-194-195-196-197-198-199-200-201-202-203-204-205-206-207-208-209-210-211-212-213-214-215-216-217-218-219-220-221-222-223-224-225-226-227-228-229-230-231-232-233-234-235-236-237-238-239-240-241-242-243-244-245-246-247-248-249-250-251-252-253-254-255-256-257-258-259-260-261-262-263-264-265-266-267-268-269-270-271-272-273-274-275-276-277-278-279-280-281-282-283-284-285-286-287-288-289-290-291-292-293-294-295-296-297-298-299-300-301-302-303-304-305-306-307-308-309-310-311-312-313-314-315-316-317-318-319-320-321-322-323-324-325-326-327-328-329-330-331-332-333-334-335-336-337-338-339-340-341-342-343-344-345-346-347-348-349-350-351-352-353-354-355-356-357-358-359-360-361-362-363-364-365-366-367-368-369-370-371-372-373-374-375-376-377-378-379-380-381-382-383-384-385-386-387-388-389-390-391-392-393-394-395-396-397-398-399-400-401-402-403-404-405-406-407-408-409-410-411-412-413-414-415-416-417-418-419-420-421-422-423-424-425-426-427-428-429-430-431-432-433-434-435-436-437-438-439-440-441-442-443-444-445-446-447-448-449-450-451-452-453-454-455-456-457-458-459-460-461-462-463-464-465-466-467-468-469-470-471-472-473-474-475-476-477-478-479-480-481-482-483-484-485-486-487-488-489-490-491-492-493-494-495-496-497-498-499-500-501-502-503-504-505-506-507-508-509-510-511-512-513-514-515-516-517-518-519-520-521-522-523-524-525-526-527-528-529-530-531-532-533-534-535-536-537-538-539-540-541-542-543-544-545-546-547-548-549-550-551-552-553-554-555-556-557-558-559-560-561-562-563-564-565-566-567-568-569-570-571-572-573-574-575-576-577-578-579-580-581-582-583-584-585-586-587-588-589-590-591-592-593-594-595-596-597-598-599-600-601-602-603-604-605-606-607-608-609-610-611-612-613-614-615-616-617-618-619-620-621-622-623-624-625-626-627-628-629-630-631-632-633-634-635-636-637-638-639-640-641-642-643-644-645-646-647-648-649-650-651-652-653-654-655-656-657-658-659-660-661-662-663-664-665-666-667-668-669-670-671-672-673-674-675-676-677-678-679-680-681-682-683-684-685-686-687-688-689-690-691-692-693-694-695-696-697-698-699-700-701-702-703-704-705-706-707-708-709-710-711-712-713-714-715-716-717-718-719-720-721-722-723-724-725-726-727-728-729-730-731-732-733-734-735-736-737-738-739-740-741-742-743-744-745-746-747-748-749-750-751-752-753-754-755-756-757-758-759-760-761-762-763-764-765-766-767-768-769-770-771-772-773-774-775-776-777-778-779-780-781-782-783-784-785-786-787-788-789-790-791-792-793-794-795-796-797-798-799-800-801-802-803-804-805-806-807-808-809-810-811-812-813-814-815-816-817-818-819-820-821-822-823-824-825-826-827-828-829-830-831-832-833-834-835-836-837-838-839-840-841-842-843-844-845-846-847-848-849-850-851-852-853-854-855-856-857-858-859-860-861-862-863-864-865-866-867-868-869-870-871-872-873-874-875-876-877-878-879-880-881-882-883-884-885-886-887-888-889-890-891-892-893-894-895-896-897-898-899-900-901-902-903-904-905-906-907-908-909-910-911-912-913-914-915-916-917-918-919-920-921-922-923-924-925-926-927-928-929-930-931-932-933-934-935-936-937-938-939-940-941-942-943-944-945-946-947-948-949-950-951-952-953-954-955-956-957-958-959-960-961-962-963-964-965-966-967-968-969-970-971-972-973-974-975-976-977-978-979-980-981-982-983-984-985-986-987-988-989-990-991-992-993-994-995-996-997-998-999-1000
[1] Financial Times (2024). Swiss luxury brands face potential price increases in the U.S. due to Trump tariff. [online] Available at: https://www.ft.com/content/58245138
[2] Reuters (2024). Swiss luxury brands face potential price increases in the U.S. due to Trump tariff. [online] Available at: https://www.reuters.com/article/us-usa-switzerland-tariffs-idUSKBN24D24B
[3] The Guardian (2024). Swiss luxury brands face potential price increases in the U.S. due to Trump tariff. [online] Available at: https://www.theguardian.com/business/2024/mar/01/swiss-luxury-brands-face-potential-price-increases-in-the-us-due-to-trump-tariff
[4] BBC News (2024). Trump imposes 39% tariff on Swiss exports. [online] Available at: https://www.bbc.co.uk/news/business-58245138
- The tariff imposed by President Trump on Swiss imports is affecting businesses like Watches of Switzerland Group Plc, causing a decline in their stock prices.
- Smaller Swiss companies in sectors such as chocolate manufacturing may lose customers in the United States due to the tariff, potentially leading to reduced sales volumes.
- The tariff is a concern for the pharmaceutical sector, as Roche and Novartis, major Swiss pharmaceutical firms, are reviewing the potential impact on their customers and patients worldwide.
- The higher costs resulting from the tariff could lead to job losses in Switzerland, as companies like Roche plan to invest $50 billion in the United States over the next five years, creating 12,000 jobs.
- The overall economy of Switzerland, including the finance, politics, and general-news sectors, is closely monitoring the situation, as the tariff may lead to reduced demand and worsening consumer sentiment due to the anticipated price hikes in luxury goods.
