Summary of Key Points from Conference Call on Swiss Watch Exports Industry Overview - The report focuses on the Swiss watch industry, specifically the export statistics for October 2025 released by the Federation of the Swiss Watch Industry [1][2]. Core Insights and Arguments - **Export Value Decline**: The value of Swiss watch exports decreased by 4% year-on-year (y-y) to CHF 2,242 million in October 2025. The value of watch exports specifically fell by 4% y-y to CHF 2,133 million, while export volume increased by 1% to 1.4 million units [1]. - **Regional Export Performance**: - Exports to the US dropped significantly by 47% y-y to CHF 224 million, attributed to a fallback from inventory stockpiling rather than a decline in underlying demand [1][2]. - Exports to Europe rose by 3% to CHF 726 million [1]. - Exports to China (including Hong Kong) increased by 8% to CHF 354 million, indicating signs of recovery in the Chinese market [1][2]. - Exports to Japan decreased by 6% to CHF 180 million, while exports to other regions rose by 8% to CHF 758 million [1]. - **US Tariff Impact**: The US and Switzerland announced a potential reduction of the US tariff on Swiss imports to 15%. However, this is not expected to significantly alter pricing strategies in the near term, as Swiss watchmakers still have existing inventories from before the tariff imposition [3]. - **Inbound Sales Trends**: Concerns were raised regarding the impact of the Chinese government's travel advisory for Japan on inbound sales. However, the rise in sales to Western visitors has lessened the importance of Chinese visitors. Inbound sales accounted for 10-20% of watch sales in Japan for companies like Casio, Citizen Watch, and Seiko [4]. Additional Important Insights - **Stock Management**: Swatch Group reported an increase in US stock from six months to ten months of sales, indicating a strategic response to the inventory situation [2]. - **Sales Performance in China**: Richemont noted a marked improvement in total sales in China, Hong Kong, and Macau, with a 7% increase in Q2 [2]. - **Local Sales in China**: Local sales in China have also been affected, with Casio's sales weighting in China dropping sharply to around 7% from a peak of 23% [4]. This summary encapsulates the key points from the conference call regarding the Swiss watch industry, highlighting the challenges and opportunities faced by companies in this sector.

Group 1: Tariff Policy Changes - President Trump announced significant tariff cuts on various food items, including beef, coffee, and tropical fruit, to combat rising grocery prices and ease inflation concerns [2][3] - The removal of tariffs has been met with mixed reactions, with companies like Starbucks and Hormel Foods potentially benefiting from lower input costs [3][4] - The market's immediate response to the tariff rollbacks was characterized by volatility, with the Dow Jones Industrial Average dropping nearly 800 points (1.7%) on November 13, 2025, and continuing to decline the following day [4] Group 2: International Trade Agreements - The U.S. reached a significant trade deal with Switzerland, reducing tariffs on Swiss goods from 39% to 15%, with Swiss companies pledging to invest $200 billion in the U.S. by 2028 [5][6] - Uzbekistan committed to purchasing and investing $35 billion over the next three years, potentially exceeding $100 billion in the next decade, across various U.S. sectors [6][7] - These trade agreements are aimed at increasing economic engagement and countering the influences of Russia and China [7] Group 3: Market Reactions and Economic Impact - Analysts have noted that Trump's tariffs were labeled as the largest U.S. tax increase as a percentage of GDP since 1993, projecting a 0.6% reduction in U.S. GDP [9][10] - The market experienced significant turmoil in early 2025, with the Dow suffering losses exceeding 1,500 points following the announcement of new tariffs [10][11] - The "on-again, off-again" approach to trade policy has left analysts scrambling, with some suggesting that a cessation of certain tariffs could materially upgrade growth forecasts for the second half of 2025 [11][12]

Core Viewpoint - Shares of Richemont and Swatch Group increased following U.S. President Donald Trump's announcement of negotiations with Switzerland to reduce the 39% tariff on exports [1] Company Summary - Richemont's stock performance improved as a result of potential tariff reductions [1] - Swatch Group also experienced a rise in share value due to the same tariff negotiation news [1] Industry Summary - The luxury goods industry may benefit from lower export tariffs, enhancing competitiveness in the U.S. market [1]

Trade Policy Impact - The Trump administration imposed new tariffs, surprising the Swiss watch industry [1] Industry Reaction - Swiss watch buyers and sellers were particularly surprised by the tariffs [1]