“Reduced” opportunities for exporting companies

Donald Trump's announcement of 39% tariffs on Swiss products has taken many Swiss export companies by surprise, particularly in the watch industry . In the "NZZ am Sonntag", Georges Kern, CEO and co-owner of Breitling, said he was "shocked".

The latter sees little room for reaction for companies heavily dependent on their overseas sales: "We can improve efficiency, reduce margins, or increase prices. But we would have to do it everywhere, not just in the United States. A sudden 40% increase would stifle the market."

The possibilities for reaction are limited both for companies that sell Swiss-made products across the Atlantic and for all others that export their products there, confirms Simeon Probst. The customs and international trade expert at PwC Switzerland reports that he was already contacted by several companies on Friday, while customs duties had previously been neglected, their impact being minimal: "That has just changed radically."

For Simeon Probst, the key for exporting company managers is to be able to irreproachably prove a product's origin. However, many of them still lack suitable digital traceability processes. One solution would be to produce in the European Union via a local subsidiary. This would make it possible to prove European origin and thus limit taxes to 15%, instead of the 39% applied to Swiss products.

Another option, however, is more complex: shipping Swiss and European components separately to the United States and then assembling them locally. However, this requires an international industrial presence and a very rigorous documentation system, the expert emphasizes.