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Switzerland slapped with 31% tariffs by Trump

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Entry-mid level Swiss watches could be most impacted

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Swiss Watch industry nervous as U.S. is biggest export

market

By Olivia Le Poidevin and Cecile Mantovani

GENEVA, April 3 (Reuters) - Swiss watch seller Sacha

Davidoff was scrambling on Thursday to understand what new U.S.

tariffs on Switzerland announced by President Donald Trump meant

for the goods he was due to export from his shop in Geneva this

week.

"I made a deal and now we're stuck. We are supposed to ship

the watch, but what do we do now? He (the client) won't want to

pay 31% more. It doesn't feel real," Davidoff said.

Shares in European luxury companies dropped on Thursday

after Trump announced import tariffs, including 31% on goods

from Switzerland and 20% from the European Union.

The vintage watches Davidoff sells are worth an average of

20,000 Swiss francs ($23,272) and could now be subject to

another 6,000 Swiss francs in import tax.

JPMorgan analysts said they expected to see most pressure on

the Swiss watchmakers, with both Cartier-owner Richemont

and Swatch Group already on thin margins. Richemont did

not reply to a request for comment. Swatch did not comment.

The U.S. is Switzerland's top foreign watch market,

accounting for 16.8% of exports, or 4.4 billion francs worth,

according to Federation of the Swiss Watch Industry.

Davidoff said he sells on average about 250 vintage watches

by Rolex, Piaget and Patek Philippe annually and that the U.S.

accounts for 60% of his business.

"I'm assuming that retailers are freaked out over there

too," said Davidoff. "It is just going to put the market into

complete freeze, or free fall."

TENSION

At a large conference hall in Geneva on Thursday where

thousands of people flocked to admire the latest products being

promoted by Swiss brands like Rolex, Cartier and Chopard,

industry insiders were fretting about the future.

"It's been tense. Some meetings with Americans have been

cancelled. Sales will surely be down. The year ahead doesn't

look very promising for the watch industry," said Clement

Fehrenbacher of Le Cercle des Horlogers.

The Neuchatel-based company manufactures the small parts

inside watches for big watch brands in Switzerland.

"It'll be very difficult to get new projects if the market

doesn't recover," Fehrenbacher said. "One of our clients is

American, and we're waiting to see."

Behind the steady flow of champagne and glittering watches

at the conference, concern was palpable among watchmakers after

an already challenging 2024, which saw sales to China, the no. 2

market, decline by more than a quarter.

Many of the big names setting out their stalls in Geneva

opted to remain silent about Trump's trade measures.

Vacheron Constantin marked its 270th birthday at the Watches

and Wonders show by presenting an intricate new wristwatch

boasting more than 1,521 component parts. But it declined to

comment on the tariffs, as did those of other famous names.

"The U.S. market is absolutely critical," said David Sadigh,

founder and CEO of Digital Luxury Group, a business consultancy.

"With potential slowdown domestically in China, I think that you

can feel some nervousness."

($1 = 0.8566 Swiss francs)

(Additional reporting by Oliver Hirt; Editing by Dave Graham

and Bill Berkrot)