Swiss Watchmaker’s Stock Plummets as Trump Imposes Stiff New Tariff

The global financial markets are on high alert following an aggressive new trade policy from the US. Watches of Switzerland Group Plc, a major retailer of luxury timepieces, saw its shares fall by as much as 6% in response to the news. The catalyst for this market turmoil is a new 39% tariff on Swiss goods, a rate that is among the highest imposed anywhere in the world by the Trump administration. Given its reliance on high-end Swiss brands like Rolex, Watches of Switzerland is seen as a direct casualty of this economic maneuver, placing it squarely in the middle of a brewing trade conflict.
The sharp decline in the company’s stock value is a clear indicator of the immediate anxiety among investors. They are concerned that the new tariff will significantly inflate the cost of watches, which could, in turn, depress sales and eat into the company’s profit margins, particularly in its crucial US market. The news came as a particular blow to the company, especially since other Swiss watch giants, such as Richemont and Swatch Group AG, were temporarily shielded from the initial fallout due to a financial market holiday in Switzerland.
This recent development adds another chapter to an already turbulent year for the Swiss watch industry. Earlier in the year, a 31% tariff threat had caused a rush of exports as businesses tried to beat the impending duties. That was followed by a period of calm and renewed hope for a more diplomatic resolution. However, the new, more punishing 39% tariff has now rekindled fears and introduced a new level of uncertainty across the entire sector.
The ultimate impact of this tariff will likely be felt by American consumers. Analysts from Jefferies estimate that if the 39% duty goes into effect, the price of Swiss watches could jump by more than 20%. This potential price hike is especially troubling for a market already dealing with a phenomenon dubbed “luxury fatigue.” Despite the grim outlook, the one-week grace period before the tariff is implemented has led some to believe this could be a strategic “negotiating tactic,” leaving the door open for a potential last-minute reversal.