Swiss exports to the US now face a 39% tariff — what's next for the iconic watch industry and precision engineering that define Switzerland's global edge?

Bern

Swiss luxury watchmakers, such as Armin Strom, are facing significant challenges due to new US tariffs of 39 percent on their products. These tariffs, which the companies say they cannot absorb, will be passed on to American retailers and customers, making Swiss watches more expensive in the US market. While some companies can temporarily redirect products to other markets, the US remains a key destination for Swiss exports.

The tariffs are expected to have a greater impact on manufacturers of lower-priced models, while luxury buyers may purchase watches abroad. Other Swiss exporters, such as Regofix and Platit, are also adapting by managing inventory and exploring alternative supply routes. The Swiss government is in ongoing negotiations with the US in hopes of reaching a new agreement.

How will US tariffs impact Swiss watchmakers?

The luxury watches produced by Swiss company Armin Strom are handmade. Many of them are one-of-a-kind. Their price is in the five- to six-digit range. Made in Biel, the watches are sold all over the world. The US is an important market. Thus, Washington's punitive tariffs of 39 percent will hit the company hard. It's very difficult to absorb these import duties, so we can't do that. 39 percent is simply not possible for us to cover. We have to pass it on. That means retailers and customers in the US will pick up the tab. Watches produced here for export to the US will become more expensive. For now, the company has orders for more than a year, orders from all over the world. So right now, there is no reason for the boss to lower prices. At the moment, we can shift a small portion of the watches allocated to America to other markets, giving preference to other markets. Customers, including Americans, who can afford these high-priced watches, often travel extensively. And not only to Zurich, but also to other major European and Asian cities. That means that Americans can also purchase Swiss luxury products anywhere in the world. The high US tariffs mainly affect manufacturers of cheaper models, says the Swiss Watch Association. I think most brands still have a few months' worth of stock left. After that, they will have to think about their pricing structure and price adjustments, including on the American market. The American market is also important for the Swiss mechanical and electrical engineering industry. The family-run company Regofix exports around a third of its tool clamping systems to America from its factory in Teniken in northern Switzerland. It's been doing so for decades. The company's managing director sensed early on that Washington might raise tariffs and acted with foresight. As an immediate measure, we replenished our entire finished goods warehouse in the US. We are fully capable of delivering for several months. The US government wants more high-quality goods to be produced domestically. That is why tariffs are going up. But outsourcing production is not an option that Regofix would even consider. We have the best conditions here in Switzerland with highly skilled workers, so we will also expand our location here. It's a different situation at Platit, a company that manufactures coding equipment. The family-owned firm also has plants abroad, which allows it to partially circumvent US customs barriers. We will now try to supply the American market with products from the European Union whenever possible. At the same time, we have been represented in the US for over 20 years and are looking at which additional value-added steps we can also carry out directly in the US. Overall, Swiss medium-sized businesses are confident in the face of attempts by the US government to put pressure on them. Many are global leaders in niche markets where competition is limited. The bill for higher US tariffs will therefore be paid by American consumers. It's noteworthy that no one is accusing the Swiss government of having negotiated poorly with President Trump. The Swiss government was one of the first to talk to the Americans. Unlike other countries or the European Union, we had a detailed agreement. But the American president didn't like that agreement. Meanwhile, the Swiss government is once again negotiating with Washington. They hope to reach an agreement by October. The clock is ticking.

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