Group 1 - The high tariff of 39% imposed by the US on Swiss goods is considered a disaster for certain industries in Switzerland [1] - Switzerland faces the highest tariffs from the US among all European countries, significantly impacting its economy [1] - Approximately 10% of Swiss exports to the US are expected to be affected by the tariffs, with the watch and technology sectors being the most impacted [1][2] Group 2 - The strong Swiss franc is exacerbating the situation for Swiss exporters, making their products more expensive [2] - The GDP growth rate of Switzerland in the second quarter has significantly declined compared to the same period last year, indicating economic weakness [2] - Swiss companies are estimated to lose $9.5 billion in revenue and $4 billion in profit due to the tariffs, particularly affecting high-priced product sectors [2]

Group 1 - The Hong Kong Trade Development Council (HKTDC) reported an increase in the export confidence index for Q3 2025, with the current index rising from 49.6 to 53.3 and the expected index increasing from 49.0 to 54.3, marking new highs since the index's upgrade in Q1 2024 [1] - The growth in export confidence is attributed to exporters adopting an advance shipping strategy, benefiting sales and new orders, as well as an increase in trade value following U.S. tariffs [1] - Hong Kong's overall export growth forecast for 2025 has been revised upward from 3% to a range of 7-9%, driven by a year-on-year export growth of 12.7% in the first seven months of 2025 [1] Group 2 - The current market classification index indicates that Mainland China (62.4, up 9.5 points) and ASEAN (56.9, up 3.5 points) are viewed as the best-performing markets, while the EU and Japan have also shown improvement [2] - Exporters are optimistic about several markets, with expected market indices showing positive outlooks for Mainland China (60.5, up 7.9 points), ASEAN (60.5, up 0.6 points), EU (55, up 4.3 points), and Japan (54.7, up 4.1 points) [2] - The toy industry (49.4, up 6.3 points) and production equipment/materials industry (45.8, down 4.6 points) remain in contraction, while the watch (54.9, up 2.8 points), electronics (54.5, up 5.6 points), clothing (51.2, up 2.3 points), and jewelry (51.3, down 0.3 points) industries are in expansion [2][3] Group 3 - The expected indices for various industries show stable growth, with electronics (56.0, up 7.6 points), watches (53.8, up 2.3 points), clothing (51.9, up 4.6 points), and jewelry (51.5, up 1.5 points) indicating positive trends [3] - Despite challenges in the trade environment, 64% of surveyed companies still expect their net profit margins to increase or at least remain stable [3]

Core Insights - The 44th Hong Kong Watch & Clock Fair and the 13th International Brand Watch Fair will be held from September 2 to 6 at the Hong Kong Convention and Exhibition Centre, featuring an AI matching platform for global exhibitors and buyers to conduct online negotiations [1][3] - The event is expected to attract over 650 exhibitors from 15 countries and regions, with a notable increase in participation from major European watch-exporting countries such as Switzerland, France, and Germany, indicating a high level of internationalization [1][3] Industry Overview - According to the Hong Kong Trade Development Council, Hong Kong is the world's second-largest watch import and export hub, with an export value of approximately HKD 28.2 billion in the first seven months of 2025, showing a reduced decline from 8.2% to 2.7% compared to the same period last year [3] - The export confidence index for the watch industry rose from 51.2 to 52.1 points in the second quarter of this year, reflecting a cautiously optimistic outlook for export prospects despite facing challenges [3]

Core Viewpoint - Swatch Group, the world's largest watch manufacturer, faced backlash in China due to a controversial advertisement featuring a model with "slanting eyes," leading to a hasty apology on social media [1][3] Group 1: Company Background and Market Position - Swatch Group was formed in the 1980s by integrating two struggling watch companies, ASUAG and SSIH, to combat the "Quartz Crisis" caused by Japanese brands [5] - The company introduced affordable and fashionable quartz watches, which helped regain over 50% of the global market share by 1993 [5] - By 2023, the Chinese market generated 2.63 billion Swiss francs in net sales for Swatch Group, accounting for 33.3% of total sales, indicating that one out of every three watches sold by the group was purchased by Chinese consumers [6][7] Group 2: Historical Context and Consumer Trends - In the 1990s, Swatch capitalized on the rising demand for individuality and fashion among young Chinese consumers, establishing a strong brand presence [6] - The brand evolved from a new entrant in the Chinese market to a core market player, becoming essential for the company's growth and stability over three decades [7]

Group 1 - Trump's second round of tariffs has elicited unexpected reactions from countries like Brazil, India, and Switzerland, leading to new uncertainties in global trade [1] - The 50% tariff imposed on Brazil is expected to increase prices for American consumers on popular products such as beef, cola, and hamburgers, while significantly impacting Brazil's export economy [5] - India's response to the 50% tariff includes halting new weapon and aircraft purchases from the U.S. and emphasizing its energy security needs, showcasing its independent foreign policy [5] - Switzerland's 39% tariff will heavily pressure its export-driven economy, particularly affecting companies like Pilatus, which has suspended aircraft deliveries to the U.S. due to increased costs [7] Group 2 - The high tariff policies aim to reduce trade deficits and protect U.S. manufacturing in the short term, but may lead to increased international trade friction and retaliatory measures from affected countries [9]

Core Viewpoint - The article discusses the implications of the new "reciprocal tariffs" imposed by the U.S. on Switzerland, highlighting the significant impact on Swiss exports, particularly in the watch and pharmaceutical industries, and the potential for price increases in Swiss goods in the U.S. market [3][6][12]. Group 1: Tariff Impact on Swiss Exports - The U.S. has raised the "reciprocal tariff" on Switzerland from 31% to 39%, making it one of the highest rates imposed by the U.S. on any country [3][12]. - The Swiss watch industry, which accounts for 16.8% of Swiss global exports, could see prices rise by over 20% due to the new tariffs [6][10]. - Other Swiss exports, including chocolate, cheese, and coffee, are also expected to be affected, with coffee products alone representing 1 billion Swiss francs in exports to the U.S. [6][12]. Group 2: Pharmaceutical Industry Response - The pharmaceutical sector, which constitutes 40% of Swiss exports, is particularly concerned about the tariffs, as 60% of its exports go to the U.S. [9][10]. - Major Swiss pharmaceutical companies like Novartis and Roche have announced significant investments in U.S. production to mitigate tariff impacts, with Roche planning to invest 50 billion USD over five years [10]. - Analysts suggest that while tariffs may affect cash flow, the pharmaceutical companies have the capacity to absorb higher tariffs compared to reducing drug prices, which could be politically challenging [9][10]. Group 3: Trade Relations and Negotiations - The Swiss government expressed regret over the tariff increase and indicated a willingness to negotiate with the U.S. to find a solution that aligns with Swiss laws and international obligations [12][13]. - The U.S. trade deficit with Switzerland has increased significantly, with a 56.9% year-over-year rise, highlighting the complexities in the trade relationship [12].