“According to this logic, Switzerland should impose tariffs. The average US import tariff of 2.2 per cent was already higher than the Swiss import tariff, which averages 1.7 per cent.”
Most American exports to Switzerland do not incur any tariffs, but the nation sells more to the US than it buys – giving it the kind of trade surplus that Trump often complains about.
Cheese traders have been in for a wild ride.Credit: iStock
Trump had already sent shockwaves through Swiss industry with his warnings about tariffs earlier this year, with the country’s exports to the US plunging by 39.6 per cent in May, according to official figures cited by the Swiss Broadcasting Corporation.
Some manufacturers may be able to find ways around the new barrier. Lindt & Sprüngli, one of the country’s biggest chocolate brands, will be spared the tariffs on the products it makes outside Switzerland, including at its New Hampshire factory in the US.
The US bought 7 per cent of Swiss chocolate exports last year. (Australia bought 2.9 per cent).
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Swiss President Karin Keller-Sutter said the 39 per cent rate was a surprise after negotiators had discussed a deal with the Trump administration last month, although it was not approved by the president himself.
“We will now analyse the situation and try to find a solution,” she told reporters. “I can’t say what the outcome will be, but it will certainly damage the economy.”
The US trade regime appears set to give wealthy customers an incentive to shop overseas. Given that a Rolex 1908 women’s platinum watch is advertised in London for about £26,800 – roughly $55,000 – an American customer would save money by flying to the UK or elsewhere to avoid the new tariff.
One specialist industry news outlet, WatchPro, said the White House decision was a “body blow” to the Swiss watchmakers, who were already suffering from lower sales.
“However the pain is spread, it will result in a major distortion in the global market for prestige watches,” said its editor-at-large Rob Corder.
Swiss watch sales fell 9.6 per cent to 1.2 million units in June, according to the Federation of the Swiss Watch Industry.
While sales in China were up, they were down heavily in the US and also fell in Japan and Hong Kong.
Trump has been photographed wearing watches from Rolex, Patek Philippe and Vacheron Constantin, all Swiss.
