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Swiss watch exports dropped by almost 10 percent in May led by a slump in shipments to the US, reversing the previous month’s surge when manufacturers were trying to get ahead of a looming trade war.
Total shipments fell 9.5 percent to 2.1 billion Swiss francs ($2.6 billion), the Federation of the Swiss Watch Industry said in a statement Thursday. Exports to the US, the single-biggest market, were down just over 25 percent.
The latest data underscore the impact President Donald Trump’s trade policies are having on the watch sector. The US imposed a 10 percent levy on imports from Switzerland in early April, and has threatened as much as 31 percent if a new trade deal isn’t reached. The watch industry would be hit hard by any increase.
Shares of Swatch Group AG and Compagnie Financiere Richemont SA fell as much as 2.3 percent and 2.5 percent respectively in early trading in Zurich.
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Asia continued to suffer, with shipments to China, Japan and Hong Kong all registering double-digit declines in the latest data.
“The rise of ‘luxury fatigue,’ a declining ‘feel-good factor’ from luxury purchases, and worsening consumer sentiment all contribute to a less optimistic outlook,” Vontobel analyst Jean-Philippe Bertschy said in a note.
The Swiss watch industry’s weakness matches a wider trend for the export-dependent country, as overall monthly foreign sales declined 42 percent, narrowing Switzerland’s trade surplus the most in almost five years.
By Levin Stamm
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