The watch market is not operating like clockwork right now.
Swiss watch exports dipped by 16.4 percent in August, hitting $1.98 billion (1.57 billion Swiss francs), a new report from the Federation of the Swiss Watch Industry says. These latest figures come in the wake of a yo-yoing market in the wake of President Trump’s tariffs, WWD reported.
This new data comes in the wake of a red-hot July for U.S. imports of Swiss watches, which totaled more than $175 million in an 107 percent increase from June, which squeaked out a mere $58 million in timepiece imports. It appears July’s bump was a rush to get ahead of Trump’s 39 percent tariff on Switzerland that was implemented on August 7. So in August, Swiss watch exports to the U.S. fell 23.9 percent, though RBC analyst Nikolaos Lafioniatis says this a “normalization” of the stateside market, WWD reported.
Other countries, too, dealt with significant declines. China fared the worst, logging a 35.6 percent decrease last month, totaling about $145 million (115.3 million Swiss francs). Not far behind the Asian nation came Germany, with an almost 25 percent drop. France saw a 9.7 percent decline, hitting around $93 million (72.6 million Swiss franc). Italy, meanwhile, actually saw a small uptick in Swiss watch exports, netting a 3.1 percent gain.
As for the Middle East, the United Arab Emirates saw an 8.7 percent decline; Saudi Arabia netted a rather large increase of 48 percent. Around the world, “Swiss watch exports declined materially in August, which may be a function of lower product flows at the expense of front-loaded U.S. inventory build, which we have also heard from recent Asia watch retailer channel checks,” Lafioniatis explained. This is also combined with continued demand weakness in Asia and lukewarm demand in Europe, he said.
Trump’s 39 percent tariff on Switzerland—one of the world’s highest—sent shockwaves through the watch industry when it was announced. Both the watch market and the pre-owned sector will see changes from the levies—but we’ll have to wait and see the true extent.
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