Swiss watch exports tumbled in August as Chinese demand remained weak and stiff US tariffs went into effect.
A watch by TAG Heuer – Divulgação
Exports fell about 17% from a year earlier, the Federation of the Swiss Watch Industry said in a statement Thursday. All main markets saw double-digit declines, with China down 36% and the US — the watch industry’s largest market — falling 24%.
To an extent, the plunge reflected an expected rebalancing following the high level of exports seen in April and July, ahead of anticipated tariffs, according to the statement.
Still, the figures highlight the more challenging conditions for Swiss-based watchmakers, including those controlled by Richemont, Swatch Group AG, and LVMH, as well as independents such as Audemars Piguet, Patek Philippe, and Rolex SA. Swatch shares fell as much as 2.1% and Richemont dipped 0.7% in early trading.
“The broad-based downturn underscores the formidable headwinds the Swiss watch industry continues to face,” Vontobel analyst Jean-Philippe Bertschy said in a note. “Recent reports from several watch brands suggested pockets of resilient US demand and a tentative stabilization in China. Today’s data, however, largely negates those signals,” he said.
The 39% levy the US applied on Switzerland — higher than the European Union and other developed economies — went into effect on Aug. 7 and has shaken the watchmaking industry. Many producers had rushed to build up inventory in the US to avoid tariffs.
One opted for a creative way to nudge the Swiss government to reach an agreement with the US. Swatch last week unveiled a special tariff edition priced at 139 Swiss francs ($176) and sold only in Switzerland. On the dial, the numbers three and nine are reversed — a nod to the 39% duty. The model will be pulled from stores once a new deal is made, according to a spokesperson.
Last Friday, U.S. Commerce Secretary Howard Lutnick struck a more positive tone and predicted that the U.S. would eventually reach a trade deal with Switzerland. The latest talks were described as “constructive.”
Platinum extended its steep rally to a 17-year high, driven by tight supplies and elevated trading activity in a new Chinese futures contract.
Platinum jewellery is one of the main uses of the precious metal – Platinum Days of Love- Facebook
Spot prices climbed as much as 4.9% on Wednesday, and have chalked up gains of more than 2% each day since Thursday. The metal has more than doubled this year, set for the biggest annual gain in Bloomberg data going back to 1987.
The surge has come as the London market shows signs of tightening, as banks park metal in the US to insure against the risk of tariffs. Exports to China have also been robust this year, and optimism for the nation’s demand has been bolstered as futures recently began trading on the Guangzhou Futures Exchange.
Highlighting the tight supply, the annualised cost of borrowing platinum for one month was at about 14% on Wednesday in London, a historically high level that indicates traders are unwilling to part with metal while inventories are low.
“We’ve got this really tight environment globally, with three-way geographic competition for metal between the US, Europe, and China,” said Ed Sterck, director of research at the World Platinum Investment Council. “You’ve still got really elevated lease rates, which is indicative of a shortage of metal.”
Against a tight background, the metal has been hit by a wave of investment that poured into precious metals this year, a rush that helped silver to also double in price and soar to a record.
As traders wait for the outcome of Washington’s Section 232 probe- which could lead to tariffs or trade restrictions on platinum- more than 600,000 ounces of the metal are sitting in US warehouses, an amount much higher than usual.
In China, the newly launched platinum futures on GFEX have attracted a wave of speculators, with prices rising well above other international benchmarks.
While Sterck said trading volumes on the new offering were significant, he noted that the contract wasn’t yet fully open for non-domestic traders to take advantage of premium prices by sending platinum to China. Smoothing out the arbitrage process would make it easier for the futures contracts to pull global benchmarks higher, as inflows cause other markets to tighten.
The exchange has shared ambitions about opening vaults overseas in the future, to take a larger role in the price discovery process, according to Sterck.
“China’s the biggest market in the world for a lot of commodities, but hasn’t necessarily been as influential in global price discovery yet,” he said.
Platinum is on course for a third annual deficit this year, helped by supply disruptions in major producer South Africa. The auto and jewellery sectors are among the biggest consumers, but high borrowing costs have been an issue for manufacturers that use the metal to produce goods ranging from chemicals to glass to laboratory equipment. Industrial users often choose the less capital-intensive option of leasing, rather than buying the commodity outright. Given the cost of borrowing, a move to buying instead could propel prices higher.
The electric-vehicle transition had long weighed on platinum and its sister metal palladium, both of which are used in catalytic converters to filter pollution. Still, slower-than-expected adoption of EVs in some markets has boosted sentiment, and the European Union this week eased requirements that would have halted sales of new gasoline and diesel-fuelled cars starting in 2035.
Platinum was up 2.2% at $1,885.40 an ounce by 3:55 p.m. in London. Sister metal palladium gained as much as 3.1%.
The perfumery chain Douglas posted higher revenue and earnings in the 2024/25 financial year. However, in the final quarter the company felt the impact of greater customer price sensitivity and intensifying competitive pressure from discount promotions, Douglas said in Düsseldorf on Thursday. In the financial year to the end of September, revenue rose by 2.8% to just under 4.6 billion euros. Earnings before interest, taxes, depreciation and amortisation (EBITDA) improved by 3.6% to 756.5 million euros.
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“In a very volatile and therefore challenging year, we delivered results broadly in line with expectations,” said Group CEO Sander van der Laan. He expects the European premium beauty market to remain on a growth trajectory, although consumer uncertainty could persist. For the new 2025/26 financial year, Douglas anticipates a slight increase in revenue to between 4.65 and 4.8 billion euros, while the adjusted EBITDA margin is likely to decline from 16.8% to around 16.5%.
In the medium term, Douglas is targeting low- to mid-single-digit percentage growth and a stable adjusted EBITDA margin. The company is also exploring expansion beyond Europe: Group CEO van der Laan sees significant potential in the Gulf region, given its affluent clientele, and is considering market entry. A final decision is expected during 2026.
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One of India’s richest states that’s heavily reliant on exports said high US tariffs are causing “irreparable damage” to businesses in the region and called on Prime Minister Narendra Modi to urgently seek a trade deal with Washington.
Tamil Nadu’s chief minister M K Stalin – MK Stalin- Facebook
M. K. Stalin, the chief minister of Tamil Nadu, said export orders have dried up in some districts, resulting in a daily loss of 600 million rupees ($6.7 million) in revenue. In Tiruppur district- also known as the knitwear capital of the nation- there’s been “a staggering wipe out” of 150 billion rupees in confirmed orders, forcing production cuts of up to 30%, Stalin said in a letter to Modi on Thursday.
US President Donald Trump slapped tariffs of 50% on Indian goods in August, one of the highest rates in the world, slashing exports to India’s biggest market and threatening Modi’s manufacturing ambitions. Despite months of negotiations and New Delhi officials expressing optimism of a deal soon, both sides remain locked in talks without any clear sign whether the tariffs will be lowered.
Stalin, who is part of the opposition and often critical of the Modi government, described the situation in Tamil Nadu as an “escalating crisis” in his letter to the prime minister. The resulting economic setback has pushed many small and medium enterprises to the “brink of collapse,” he added.
The US is India’s biggest export market and the high tariffs have impacted labour-intensive sectors such as textiles, gems and jewellery, and leather and footwear, forcing the federal government to step in with relief measures for exporters.
“The current trade stalemate is not merely an economic setback but a looming humanitarian challenge due to the irreparable damage caused by the tariffs,” Stalin said in his letter.
Ruled by the Dravida Munnetra Kazhagam party, Tamil Nadu is one of India’s largest exporting hubs for textiles, electronics, leather and footwear, and automobiles. As the country’s most industrialised state, it competes with Vietnam and Mexico and is home to Apple Inc. factories. Mobile phone exports are currently exempted from Trump’s tariffs.
Tamil Nadu contributes 28% to the nation’s textile exports and employs around 7.5 million people in the sector, Stalin said. The leather and footwear industry in the state contributes 40% to the nation’s sectoral exports and employs over one million workers, he said.
“In this context, I implore you to prioritise resolution of this tariff issue through bilateral agreement at the earliest possible juncture,” the letter said.
Chandrababu Naidu, chief minister of Andhra Pradesh state who is Modi’s coalition partner in the government, has also raised concerns about the damage the high US tariffs is having on the state’s shrimp exports.
Politics8 years ago