URGENT UPDATE: Swiss luxury brands are bracing for a dramatic price surge as U.S. President Donald Trump has just announced a staggering 39% tariff on imports from Switzerland, set to take effect on July 15, 2023. This move is expected to have immediate and severe repercussions for Swiss products, including watches, chocolate, and cheese.
Industry groups warn that both Swiss companies and American consumers will feel the impact of these tariffs, which were confirmed following Trump’s executive order on Thursday. The order targets 66 countries, including the European Union and Taiwan, escalating tensions in global trade.
Swiss President Karin Keller-Sutter expressed shock at the announcement during Switzerland’s National Day celebrations. She revealed that negotiations last month had led to expectations of a more favorable agreement, but those discussions did not receive approval from Trump. “We will now analyze the situation and try to find a solution,” she said, emphasizing the potential damage to the Swiss economy.
The U.S. goods trade deficit with Switzerland reached $38.5 billion last year, a 56.9% increase from the previous year, which Keller-Sutter suggests influenced the steep tariff decision. This is a particularly pressing issue for Swiss watch manufacturers, whose luxury timepieces already command high prices. With the new tariffs, a single watch could soon cost thousands more, threatening sales in key markets like the United States, Japan, and Hong Kong.
The Federation of the Swiss Watch Industry condemned the tariffs, stating that they pose a serious challenge to bilateral relations. Exports were already declining, and the added tariff burden could push Swiss brands further into a sales slump. Major brands such as Swatch and Rolex have yet to comment.
Meanwhile, Swiss chocolatiers are also facing dire consequences. Roger Wehrli, CEO of the Association of Swiss Chocolate Manufacturers, noted that the combined effect of the tariff and currency exchange rates could lead to nearly a 50% increase in costs for American consumers. “I expect that our industry will lose customers in the United States, and that sales volumes will decrease heavily,” he warned. Wehrli is urging Swiss chocolatiers to explore alternative markets while hoping that American consumers will continue to value the quality of Swiss chocolate despite rising prices.
Pharmaceutical giants like Roche and Novartis are also bracing for impact. Roche stated it is committed to ensuring patient access to medications amid the tariff uncertainties. “We believe pharmaceuticals should be exempt from tariffs,” the company said, underscoring the potential disruption to supply chains and innovation.
As the clock ticks down to the implementation of these tariffs, Swiss businesses are in a race against time to mitigate the impending financial fallout. Consumers in the U.S. are urged to prepare for significant price increases on beloved Swiss products, while manufacturers scramble to adapt to this challenging new landscape.
Watch for further developments as both Swiss and American officials work to navigate the fallout from this escalating trade conflict.
