How will Swiss watchmakers adjust to the 39 per cent US import tariff?

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Swiss Watchmakers Adjusting to 39 Per Cent US Import Tariff Through Shipment Acceleration, Price Hikes, and Market Pauses

Swiss watchmakers are responding to the imposition of a 39 per cent US import tariff by accelerating shipments of high-end timepieces to the United States before the deadline, subsequently blocking new orders on their US websites. Companies are now calculating necessary price increases to offset the tariff's impact, with some anticipating significant hikes that could render their products less competitive in the American market. This strategic shift also involves pausing US orders and exploring alternative international markets to mitigate substantial business losses.
Pre-Tariff Shipment Rush

In anticipation of the new tariff, Swiss watch manufacturers like DuBois et fils expedited shipments of their luxury watches to the US. DuBois et fils, founded in 1785, sent several high-value watches from its factory in Muttenz just before the 39 per cent tariff took effect on Thursday. This proactive measure aimed to clear customs and reach American consumers under the previous, lower tariff rate, which had been 10 per cent since April.
Anticipated Price Increases and Order Pauses

The substantial 39 per cent tariff is forcing Swiss watchmakers to recalculate their pricing strategies. Thomas Steinemann, CEO of DuBois et fils, stated that the tariff is a "huge disaster" for the industry and will significantly increase the cost for consumers. For instance, the price of a DuBois DBF008 watch is projected to rise from US$10,800 to US$14,500. Consequently, many businesses, including DuBois et fils and vintage watch boutique Davidoff Brothers, have blocked new orders on their US websites and are planning to put the American market on hold.
Exploring Alternative Markets and Economic Impact

The broader Swiss watch industry, which includes prominent brands such as Rolex, Patek Philippe, and Omega, is contemplating price hikes and seeking new markets beyond the US. The United States represented 17 per cent of Switzerland's total watch exports, valued at 26 billion Swiss francs (US$32 billion) last year. Experts suggest that the combined effect of the tariff and a weaker dollar could make Swiss watches approximately 65 per cent more expensive for US consumers. This situation could lead to a significant loss for the United States, as consumers may opt to purchase elsewhere, and analysts estimate a potential reduction in Swiss GDP growth by 0.3 per cent to 0.6 per cent, possibly increasing unemployment.

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How will Swiss watchmakers adjust to the 39 per cent US import tariff?

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