Swiss industries react to new 39 percent US tariffs

LAST week, a 39-percent tariff on Swiss exports to the United States went into effect, despite last-minute negotiations between Swiss and U.S. representatives. This unexpected levy has sent shockwaves through various industries in Switzerland, particularly affecting sectors like industrial machinery, Swiss cheese, chocolate, and luxury watches.

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Horage Watches is considering moving some production to the US due to steep new tariffs affecting a third of its sales.
Industry leaders in Switzerland are alarmed by the 39% tariffs, which are higher than those for EU and Japanese competitors.
The Swiss government is negotiating with the US to reduce tariffs, but the outcome remains uncertain and jobs are at risk.

One notable response comes from Horage Watches, a company founded in 2008 in Biel, the heart of Swiss watchmaking. Producing around 850 timepieces annually, approximately a third of their output is sold to American customers. With the introduction of the tariffs, Horage is now contemplating relocating part of its production to the U.S.

CEO Andreas Fels expressed concerns about the long-term implications of the tariffs.

"That is something I think is an issue and if the tariffs are staying longer in place in this level, then of course the only way to really get around that means do we have to move manufacturing to a certain degree to the US and America used to be a very big watch manufacturer. It used to be the biggest watch manufacturer a long time ago. And that is an option which we have a serious look at," Fels said.

Horage employs 30 skilled professionals, including engineers, watchmakers and specialists in high-precision movements. It works with around 200 suppliers of its components, and a move to the U.S. will not be a straightforward process, but something that Horage hopes to turn into a new positive chapter. But not all companies affected by the spike in tariffs have this option.

"The Swiss entrepreneurs and industry leaders, we were all shocked by the news of 39 percent tariffs. Not only the magnitude, but also that we should pay almost more than our competitors in the European Union or in Japan. So this is very tough and companies now must act," said Martin Hirzel, President of Swissmem, the Swiss Industry Federation.

Economists warn that the tariff burden could put thousands of jobs at risk in Switzerland, and some workers say they are worried about this development.

"It's a big mistake, you know, he hasn't just done to Switzerland, he also did the same thing to China and the European Union and some other countries. It's a huge mistake," said a resident.

"I would say there is no explanation for this, and I hope that the Swiss Parliament and the negotiations go all right. I'm not very optimistic," said another resident.

The Swiss government has stated its commitment to engaging in discussions with the U.S. to reduce the tariffs as quickly as possible. Negotiations are currently underway, but the outcome remains uncertain.