Alarm Sounded

Few nations are as dependent on a single product as Switzerland is upon its world-famed watches. The manufacture of precision timepieces employs 10% of its labor force, accounts for 22% of the nation's total exports. The U.S. takes more than half of this total, thus provides Switzerland with dollars that help make her economy the soundest in Europe. Last week the usually complacent Swiss watchmakers were wound up tight as an over-stressed mainspring. The U.S. Tariff Commission had reportedly recommended to Harry Truman that duties on Swiss watch movements be raised. This would drastically cut Swiss exports to the U.S.

Alarmed, the Swiss watch industry met to protest. Maurice Vaucher, president of the Swiss Federation of Watch Manufacturers, reminded the Tariff Commission that Swiss imports "provide a livelihood for 15,000 Americans . . . engaged in the manufacture of cases, dials, watch straps and other accessories . . . and that these imports provide the major profit for 30,000 [U.S.] jewelry stores." Furthermore, the watchmen pointed out, Switzerland buys $5 worth of U.S. products for every $3 worth of its products that it sells in the U.S.

Although they were shouting long before the tariff fight had even begun to settle, there seemed little doubt that the Swiss had the story about right. Since 1951, three major U.S. jeweled-watch manufacturers, Hamilton, Elgin and Waltham, have been constantly pressuring the Tariff Commission to raise duties on Swiss imports. Their argument: Swiss movements have cut into their market until they now sell only 19% of the watches sold in the U.S. in comparison with 50% in 1941.

By week's end, several big U.S. manufacturers, importers and assemblers, whose movements are largely Swiss-made, ticked off arguments that bolstered the Swiss rather than the U.S. claims. The American Watch Association, which represents such American-owned companies with Swiss subsidiaries or plants as Benrus, Bulova, Gruen and Longines-Wittnauer, was quick to point out that out of every dollar spent in the U.S. for a Swiss watch, 85-c- stays in this country; only 15-c- goes to Switzerland. It was estimated that for every dollar the U.S. Tariff Commission may tack on to Swiss movements, the U.S. consumer will have to pay about $6 more the next time he buys a timepiece. Actually, the matter is more than an argument over watches: the outcome may well serve as an indication of the U.S.'s willingness to trade with the rest of the world on terms satisfactory to both sides.

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