Swatch CEO hopes for US-Swiss trade deal: 'It's not doomsday'
Chief Executive Nick Hayek told Reuters on Monday that the owner of the Omega, Tissot and Longines brands was well positioned to ride out trade tensions but called for urgent talks after the higher tariff rate was revealed last week.
The 39% rate - one of the highest tariffs in U.S. President Donald Trump's global trade reset - is due to be implemented from Thursday.
The rate was announced late last week when Swiss markets were closed for the Swiss National Day holiday. But the news dealt a blow on Monday to Swiss watch and luxury shares, including Swatch's, which fell nearly 5% at one point before paring back losses.
"It's not doomsday. Of course, a settlement can be reached. Why would Donald Trump say tariffs are coming on August 1 and not implement them until the 7th? The door is always open," Hayek told Reuters in an interview.
Switzerland's government was due to hold an extraordinary cabinet meeting on Monday to discuss its response to the tariff.
Hayek called on Swiss President Karin Keller-Sutter to travel quickly to the United States to work to resolve the issue.
"She should take the plane and go to Washington. That would increase the chances of a deal enormously," he said.
Hayek added that the firm had three to six months of stock in the United States, which would help protect it from tariffs in the world's largest market for Swiss watches.
He added that Swatch was planning to ship "a little bit more" inventory to the United States over the next few days.
"Our brands are growing in the United States very strongly, and consumption is good," Hayek said. "I am very happy we transferred a lot of stock already in the first six months of this year when the story about the tariffs started."
"We shipped much more products to the United States, so this means there is not an immediate impact on us," he added.
The U.S. market generated 18% of Swatch's 2024 sales, according to broker Jefferies.
The United States is also the biggest foreign market for Swiss watches overall, accounting for 16.8% of exports worth about 4.4 billion Swiss francs ($5.44 billion), according to the Federation of the Swiss Watch Industry.
($1 = 0.8093 Swiss francs)
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