Swiss watchmakers rise on optimism over possible reduction in Trump tariffs

Shares of Richemont and Swatch Group, homeowners of luxurious Swiss watch manufacturers, rose on Tuesday after US President Donald Trump stated he was working with Switzerland on a deal to decrease the 39% tariff price on Swiss exports to the US.

Shares of Swatch, whose manufacturers embody Omega, Tissot, and Longines, gained 4.2% in early buying and selling. Richemont, which owns Cartier, IWC and Piaget, was 2% larger. Trump introduced on the finish of July that Swiss exports to the US could be topic to a 39% tariff from August 7, among the many highest duties levied in his world commerce reset.

The Swiss authorities declined to remark on Monday after Bloomberg reported Bern was near reaching a deal to scale back tariffs on its exports to fifteen%.

“We’re working on a deal to get their tariffs a little bit lower,” Trump stated on Monday. “I haven’t set any number, but we’re going to be working on something to help Switzerland.”

Swatch stated on Tuesday it will not remark on any offers earlier than that they had been carried out. Richemont didn’t reply to a request for remark.

The US is the most important marketplace for Swiss watches, accounting for 19% of all Swiss watch exports, based on the Swiss watch trade federation. “Resolving the tariff dispute would be an early Christmas present for both listed Swiss luxury players and for the whole Swiss watch industry,” stated Zuercher Kantonalbank analyst Patrik Schwendimann.

The US can be the most important marketplace for luxurious group Richemont – whose different manufacturers embody Cartier, Van Cleef & Arpels, Chloe, and Montblanc – accounting for an estimated 21% of group gross sales final 12 months, Schwendimann stated. Swatch generated 15% of its gross sales there, he stated.

Swatch had the next publicity to US tariffs as a result of most of its exports got here from Switzerland, whereas greater than half of Richemont’s exports don’t originate in Switzerland, Schwendimann stated, referring to jewelry made in Italy and France.

Kepler Cheuvreux analyst Jon Cox stated a minimize in tariffs to fifteen% would ease strain on profitability. “Price increases can also put off consumers, who might either shop abroad or buy a product that was not made in Switzerland,” stated Cox.