US-Swiss Trade Agreement Optimism from Swatch CEO: 'Not the End of the World'
The United States' decision to impose a 39% tariff on Swiss goods, including watches and luxury items, has sent shockwaves through the Swiss industry. The tariff, which took effect on August 7, 2025, has prompted an extraordinary cabinet meeting by the Swiss government to discuss their response.
Swatch Group, a Swiss watchmaker that owns brands such as Omega, Tissot, and Longines, is one of the companies most affected by this tariff. The U.S. market accounts for a significant portion of Swatch's sales, with approximately 18% of its 2024 sales coming from the U.S., according to broker Jefferies.
Swatch Group's CEO, Nick Hayek, has expressed concern about the tariff but remains hopeful. In response, Swatch has increased its inventory in the U.S., transferring a significant amount of stock in the first six months of 2024, and is planning to ship "a little bit more" inventory to the U.S. over the next few days. Swatch currently has three to six months of stock in the U.S., which can help protect it from tariffs.
Hayek has also called for urgent talks with the Swiss government and even suggested that Swiss President Karin Keller-Sutter should travel to the United States to work on resolving the issue. His statements indicate a degree of resilience and adaptability in Swatch's strategy to deal with the potential tariff.
The Swiss government remains committed to continuing trade talks with the U.S. to seek a resolution despite the tariffs coming into force. They maintain that Switzerland has no unfair trade practices that would justify such duties and have chosen not to pursue retaliatory measures at this time. However, the current U.S. positions remain firm, making progress challenging.
The Swiss Federal Council has stated it will adapt negotiations and focus on measures to support Swiss export businesses affected by the tariffs while keeping dialogue open. This approach contrasts with rising calls from some political voices for limited countermeasures, particularly concerning precious metals exports.
The exchange rate between the U.S. dollar and Swiss franc is approximately 0.8093 Swiss francs per U.S. dollar. The information about the potential tariff impact on Swatch's sales and operations is still developing.
The Swiss government and Swatch Group's responses to the U.S. tariff highlight the challenges faced by the Swiss watch industry, which is heavily reliant on exports to the U.S. The industry will continue to closely monitor developments and adapt its strategies to navigate these challenging times.
- The tariff's impact on the Swiss watch industry is not limited to Swatch Group, as it affects the business sector as a whole, making it a matter of general-news interest and a potential topic for discussion in finance and political circles.
- The Swiss government's focus on measures to support export businesses and the urgency expressed by Swatch Group's CEO for diplomatic talks with the U.S. government indicate a symbiotic relationship between business and politics, where the health of companies like Swatch can be influenced by decisions made in political arenas.
