A Swiss watch icon navigates Trump’s tariff uncertainty

Swiss watchmaker Swatch Group’s Chief Executive Officer Nick Hayek has a tariff problem. And the clock is ticking.

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US President Donald J. Trump unleashed a 39% tariff on most Swiss-made products last week, which will come into effect on Thursday. The country — known for its luxury timepieces, chocolate and secretive banks — is racing to gain a reprieve.

Mr. Trump’s tariffs — aimed, he says, at erasing global trade imbalances — have rattled companies around the world and sparked scrambles to shift supply chains and sales channels by many brands — few more recognizable than Swatch, which became famous for its plastic watches.

The United States is the largest export market for Swiss watches.

Shares in Swiss watch and luxury firms, including Swatch, slid nearly 5% on Monday on news of the tariffs before paring back losses.

Swatch Group — the biggest Swiss watchmaker by sales volume — is trying to adapt, Mr. Hayek told Reuters. The company has front-loaded shipments to the United States, is tapping US shoppers as they travel abroad, and has also raised its prices.

Part of the challenge for the industry is that Swiss watches need to be 60% made in the country, making it hard to shift production elsewhere.

“We produce everything in Switzerland, not in China. And we have a high cost. And when you add a 39% tariff, we cannot absorb that. So prices will go up for sure,” Mr. Hayek said on Monday, without giving specifics on the potential rise.

Swatch Group, which also owns Swiss luxury watch brands such as Omega, Tissot and Longines, already raised prices by 5% following Mr. Trump's first tariff announcement in April.