Swiss watch exports jump in April ahead of threatened US tariffs

[ZURICH] Swiss watch exports jumped by almost a fifth in April as shipments to the US more than doubled ahead of expanded tariffs threatened by President Donald Trump.

Total shipments rose 18 per cent to reach 2.5 billion Swiss francs (S$3.9 billion) for the month, according to the Federation of the Swiss Watch Industry, with exports to the US, the single biggest market, up a whopping 149 per cent.

This is the “result of early shipments prompted by the announcement of US tariffs,” said Jean-Philippe Bertschy, an analyst at Vontobel. Watches made from precious metals, steel and bimetallic materials, products also targeted by Trump, saw the most growth.

Exports fell 6.4 per cent to the rest of the world, continuing a weak start to the year. The US jump was likely a one-off response by exporters seeking to avoid higher tariffs, rather than a structural increase in demand, Bertschy said.

Trump imposed a 10 per cent levy on imports from Switzerland in early April, and has threatened a 31 per cent surcharge if a new trade deal isn’t reached, though the July nine deadline could be extended. The watch industry would be hit hard by any increase.

Asian markets displayed further weakness, with exports to Singapore falling 9 per cent, China off 30 per cent and Hong Kong down 23 per cent.

In the latest earnings season luxury players including Richemont, LVMH, and Hermès reported sales drops in watches.

“The rise of ‘luxury fatigue,’ a declining ‘feel-good factor’ from luxury purchases, and worsening consumer sentiment all contribute to a less optimistic outlook,” according to Bertschy. BLOOMBERG