Swiss luxury watchmakers slip after Trump tariff blow
Shares in Swiss luxury watchmakers, including Richemont and Swatch, were volatile in early trade on Monday, underscoring the challenge the industry faces after U.S. President Donald Trump imposed a steep 39% tariff on Switzerland.
The sector, which exported watches worth 26 billion Swiss francs ($32.79 billion) in 2024, is already under pressure from a stronger franc and falling global demand. Watch exports are on track to hit their lowest levels since the COVID-19 pandemic in 2020.
'The impact of the U.S. tariffs, if they stay at 39%, could be devastating for numerous brands in Switzerland,' said Jean-Philippe Bertschy, an analyst at Vontobel.
Shares in Richemont and Swatch were both down around 1% at 09:06 a.m. GMT, paring back losses after earlier falling as much as 3.4% and 5%, respectively.
Bertschy linked the move to hopes of Switzerland still getting a better deal as the tariffs are effective as of August 7. Swatch Group CEO Nick Hayek, meanwhile, called on Swiss President Karin Keller-Sutter to meet Trump.
A separate report by Reuters said Switzerland's government would hold an extraordinary cabinet meeting on Monday to discuss its response to tariffs, which threaten to inflict heavy damage to its luxury goods industry.
The duties are scheduled to go into effect on Thursday, giving Switzerland a small window to strike a better deal.
Switzerland was left stunned on Friday after Trump hit the country with one of the highest tariffs in his global trade reset, with industry associations warning that tens of thousands of jobs were at risk.
President Keller-Sutter told Reuters on Friday that Switzerland had given U.S. goods virtually free access to its market, and Swiss companies had made very important direct investments in the U.S.
'The president (Trump) is really focused on the trade deficit, because he thinks that this is a loss for the United States, that every year with Swiss exports, the United States loses, well, 38.5 billion (francs),' she told Reuters.
'Tariffs can change at any moment due to the unpredictability of the Trump administration,' said Georges Mari, co-owner of Zurich-based investment firm Rossier, Mari & Associates, which holds shares in Swatch, adding that it is 'impossible to make a serious forecast.'
Monday was the first day of trading following the U.S. tariff announcement, as markets were closed on Friday for the Swiss National Day holiday. Stocks and the Swiss franc both tumbled in response to heavy levies.
An index of Swiss blue-chip stocks hit its lowest level since mid-April on Monday, as shares in banks, luxury retailers, and pharma companies dropped.
The SMI index was last down 0.6% on the day, compared with a 0.6% rise in the regional STOXX 600 index. The Swiss franc was the worst-performing major currency against the dollar, which was last up 0.7% at 0.809 francs, not far off Friday's one-month highs.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Jazeera
an hour ago
- Al Jazeera
Trump accuses banks of discriminating against his supporters
United States President Donald Trump said he believes that banks discriminate against him and his supporters, adding that Bank of America and JPMorgan Chase had previously refused to accept his deposits. 'They totally discriminate against, I think, me maybe even more, but they discriminate against many conservatives,' he told CNBC in an interview on Tuesday. 'I think the word might be Trump supporters more than conservatives.' Trump made the comments when asked about a report by the Wall Street Journal that said he planned to punish banks that discriminated against conservatives, but did not address the order specifically. The order instructs regulators to review banks for 'politicized or unlawful debanking' practices, according to a draft reviewed by the Reuters news agency. 'Well, they did discriminate,' Trump said of actions taken by JPMorgan Chase after his first term in office. 'I had hundreds of millions, I had many, many accounts loaded up with cash … and they told me, 'I'm sorry sir, we can't have you. You have 20 days to get out.'' Trump said, without providing evidence, that he believed that the banks' refusal to take his deposits indicated that the administration of former US President Joe Biden had encouraged banking regulators to 'destroy Trump'. Trump said he subsequently tried to deposit funds with Bank of America and was also refused, and eventually split the cash among a number of smaller banks. 'The banks discriminated against me very badly,' he said. In a statement, JPMorgan did not address the president's specific claim that it had discriminated against him. 'We don't close accounts for political reasons, and we agree with President Trump that regulatory change is desperately needed,' JPMorgan said. 'We commend the White House for addressing this issue and look forward to working with them to get this right.' Bank of America declined to comment. 'Reputational risk' During Biden's administration, regulators could have asked the banks why they were providing banking services to Trump because of the 'reputational risk' issue, a source familiar with the matter told Reuters news agency. Another source said that banks were under intense scrutiny and pressure with regards to what qualified as a reputational risk for banks and they needed to be careful due to Trump's legal entanglements. The source also added that at present JPMorgan continues to have a banking relationship with members of the Trump family that dates back to years ago and that they also bank a number of campaign accounts related to Trump. After Trump took power, the Federal Reserve announced in June it was directing its supervisors to no longer consider 'reputational risk' when examining banks, scrapping a metric that had been a focus of industry complaints. The Wall Street Journal reported late on Monday that the expected executive order would instruct regulators to investigate whether any financial institutions breach the Equal Credit Opportunity Act, antitrust laws or consumer financial protection laws by dropping customers for political reasons. It said the order could be signed as early as this week, authorising monetary penalties, consent decrees or other disciplinary measures against violators. The White House had no immediate comment on the reported order. Trump in January said the CEOs of JPMorgan Chase and Bank of America denied services to conservatives. At the time, the two banks denied making banking decisions based on politics. 'This seems to be rhetoric that will likely be forgotten by lunchtime,' said David Wagner, head of equities at Aptus Capital Advisors. 'I don't see any material impact on banks, as there are many other drivers that will ultimately presage performance for banks, such as deregulation.' Both banks' stocks are taking a hit on Wall Street. As of 11am in New York (15:00 GMT), JP MorganChase is down 1.6 percent and Bank of America is down 1.4 percent. While Wells Fargo was not named in particular, the competing financial institution's stock is down 1.3 percent as well. Markets respond Banks have consistently argued that any complaints about 'debanking' should be aimed at regulators, as they argue that onerous rules and bank supervisors policing firms can discourage them from engaging in certain activities. 'The heart of the problem is regulatory overreach and supervisory discretion,' the Bank Policy Institute, an industry group, said in a statement. 'The banking agencies have already taken steps to address issues like reputational risk, and we're hopeful that any forthcoming executive order will reinforce this progress by directing regulators to confront the flawed regulatory framework that gave rise to these concerns in the first place.' In January, Trump claimed that Bank of America was debanking conservatives in a Q&A session at the World Economic Forum in Davos, Switzerland with Bank of America CEO, Brian Moynihan. 'I hope you start opening your bank to conservatives, because many conservatives complain that the banks are not allowing them to do business within the bank, and that included a place called Bank of America,' Trump said at the time. Separately, in March, the Trump Organization, a holding company for the Trump family's business ventures, sued Capital One Financial for closing accounts for what the Trump Organization alleged were political reasons.
Al Jazeera
an hour ago
- Al Jazeera
Rwanda agrees to accept ‘third-party' migrant deportations from the US
Rwanda has confirmed it will accept deported migrants from the United States, as President Donald Trump continues to push for mass deportation from the North American country. On Tuesday, a spokesperson for the Rwandan government, Yolande Makolo, acknowledged that the African country had agreed to receive up to 250 deported individuals. Rwanda is now the third African country, after South Sudan and Eswatini, to strike a deal with the US to accept non-citizen deportees. 'Rwanda has agreed with the United States to accept up to 250 migrants, in part because nearly every Rwandan family has experienced the hardships of displacement, and our societal values are founded on reintegration and rehabilitation,' Makolo said in a statement obtained by the Reuters news agency. But the Trump administration's efforts to rapidly deport migrants from the US have raised myriad human rights concerns, not least for sending people to 'third-party countries' they have no personal connections to. Some of those countries, including Rwanda, have faced criticisms for their human rights records, leading advocates to fear for the safety of deported migrants. Other critics, meanwhile, have blasted Trump for using African countries as a 'dumping ground' for migrants with criminal records. In this week's statement, Makolo appeared to anticipate some of those criticisms, underscoring that Rwanda would have the final say over who could arrive in the country. 'Under the agreement, Rwanda has the ability to approve each individual proposed for resettlement,' she said. 'Those approved will be provided with workforce training, healthcare, and accommodation support to jumpstart their lives in Rwanda, giving them the opportunity to contribute to one of the fastest-growing economies in the world over the last decade.' Trump's mass deportation campaign In 2024, Trump successfully campaigned for re-election in the US on the premise that he would expel the country's population of undocumented immigrants, a group estimated to number around 11 million. But many of those people have been longtime members of their communities, and critics quickly pointed out that Trump lacked the infrastructure needed for such a large-scale deportation effort. In response, the Trump administration has surged money to immigration-related projects. For example, his 'One Big Beautiful Bill', which was signed into law in July, earmarked $45bn for immigration detention centres, many of which will be run by private contractors. An additional $4.1bn in the law is devoted to hiring and training more officials with Immigration and Customs Enforcement (ICE), with another $2.1bn set aside for bonuses. But the Trump administration has made expelling migrants from the country a top priority, prompting legal challenges and backlash to the rapid pace of such deportations. Critics say deported migrants have been denied their right to due process, with little to no time allotted to challenge their removals. Then, there are the cases where undocumented migrants have been deported to 'third-party countries' where they may not even speak the language. Within weeks of taking office in January, Trump began deporting citizens of countries like India, China, Iran and Afghanistan to places like Panama, where migrants were imprisoned in a hotel and later a detention camp. Trump also accused more than 200 men, many of them Venezuelan, of being gang members in order to authorise their expedited removal to El Salvador in March. Lawyers have since cast doubt on Trump's allegations, arguing that many of their clients were deemed to be gang members based on little more than their tattoos and fashion choices. El Salvador reportedly received $6m as part of a deal to hold the men in a maximum security prison, the Terrorism Confinement Centre or CECOT, where human rights abuses have been documented. The men were ultimately released last month as part of a prisoner exchange with Venezuela, but a federal court in the US continues to weigh whether the Trump administration violated a judge's order by allowing the deportation flights to leave in the first place. Deportations to Africa In May, the Trump administration unveiled efforts to start 'third-party' deportations to countries in Africa as well, sparking further concerns about human rights. Initially, Libya was floated as a destination, and migrants were reportedly loaded onto a flight that was prepared to take off when a judge blocked its departure on due process grounds. The Libyan government later denied reports that it was willing to accept deported, non-citizen migrants from the US. But the Trump administration proceeded later that month to send eight migrants on a flight to South Sudan, a country the US State Department deems too dangerous for Americans to travel to. That flight was ultimately diverted to Djibouti, after a judge in Massachusetts ruled that the eight men on board were not given an adequate opportunity to challenge their removals. Seven of them hailed from Laos, Vietnam, Cuba, Mexico and Myanmar. Only one was reportedly from South Sudan. The Trump administration said all eight had criminal records, calling them 'sickos' and 'barbaric'. A spokesperson pledged to have them in South Sudan by the US Independence Day holiday on July 4. The US Supreme Court paved the way for that to happen in late June, when it issued a brief, unsigned order allowing the deportation to South Sudan to proceed. The six conservative members of the bench sided with the Trump administration, while the three left-leaning justices issued a vehement dissent. They argued that there was no evidence that the Trump administration had ascertained the eight men would not be tortured while in South Sudan's custody. They also described the deportations as too hasty, depriving the men of their chance to appeal. 'The affected class members lacked any opportunity to research South Sudan, to determine whether they would face risks of torture or death there, or to speak to anyone about their concerns,' the justices wrote, calling the government's actions 'flagrantly unlawful'. In mid-July, the Trump administration also began deportations to Eswatini, a tiny, landlocked country ruled by an absolute monarchy. It identified the five deported individuals as hailing from Laos, Vietnam, Jamaica, Cuba and Yemen. 'This flight took individuals so uniquely barbaric that their home countries refused to take them back,' administration spokesperson Tricia McLaughlin wrote on social media. Lawyers for the five men have since reported they were denied access to their clients, who are being held in a maximum-security prison. Cozying up to Trump? Little is known so far about the newly announced deportations to Rwanda. It is not yet clear when deportation flights to Rwanda will begin, nor who will be included on the flights. Reuters, however, reported that Rwanda will be paid for accepting the deportations in the form of a grant. The amount is not yet known. Rwanda also has set parametres for whom it may accept. No child sex offenders will be allowed among the deportation flights, and the country will only accept deported individuals with no criminal background or whose prison terms are complete. But the deportation announcement continues a trend of Rwandan authorities seeking closer relations with the Trump administration. In June, President Trump claimed credit for bringing peace between Rwanda and its neighbour, the Democratic Republic of the Congo (DRC). He invited leaders from both countries to attend a ceremony at the White House and sign a peace deal. Critics, however, noted that the deal was vague and did not mention Rwanda's support for the M23 paramilitary group, which has carried out deadly attacks in the DRC. The deal also appeared to pave the way for Trump to pursue another one of his priorities: gaining access to valuable minerals in the region, like copper and lithium, that are key to technology development. In an interview with The Associated Press news agency, Rwandan political analyst Gonzaga Muganwa said that his government's recent manoeuvres seem to reflect the mantra that 'appeasing President Trump pays'. Muganwa explained that Tuesday's agreement to accept migrants from the US will strengthen the two countries' shared bond. 'This agreement enhances Rwanda's strategic interest of having good relationships with the Trump administration,' he said.
Al Jazeera
4 hours ago
- Al Jazeera
Is Trump's Africa deal everything he advertised?
As Rwanda and the Democratic Republic of the Congo hold their first official meeting under a US-backed peace deal, Trump is touting it as a diplomatic win. But critics say his motive isn't peace – it's power. In this week's Fact Check, Jillian Wolf investigates how cobalt, coltan and a brewing rivalry with China are shaping America's playbook in Africa.
