Swiss Watch industry Faces Turbulence as U.S. Tariffs Loom
The Swiss watch industry is bracing for a significant downturn as newly imposed U.S. tariffs threaten to send sales plummeting to levels not seen since the height of the COVID-19 pandemic in 2020.Recent market reactions signal growing anxiety, with shares of luxury watch giants Richemont adn Swatch experiencing initial declines on Monday following the tariff announcement.
Trading resumed on Monday after the Swiss National Day holiday, immediately exposing the market to the impact of the tariffs. Initially, Richemont shares fell as much as 3.4%, while Swatch saw a drop of 5%, though both partially recovered to close down 0.8% by 08:25 a.m.GMT.
Understanding the New Tariffs
The U.S.has levied a substantial 39% tariff on certain Swiss watch imports. This move has sparked concern throughout the industry, with analysts predicting potentially “devastating” consequences for many brands. I’ve found that tariffs of this magnitude can fundamentally alter market dynamics, especially for price-sensitive segments.Specifically, entry- to mid-price watches are expected to bear the brunt of the impact. The U.S. represents Switzerland’s largest export market for watches,accounting for 16.8% of total exports – a value of approximately 4.4 billion swiss francs ($5.45 billion) in 2023.
Industry Response and Concerns
Many within the industry believe the tariffs will effectively halt shipments to the U.S. until the situation resolves. Shahzaib Khan, a Swiss luxury watch exporter, expressed that numerous brands simply won’t be able to absorb the 39% increase.
Here’s what we know about the exposure of major players:
Richemont: While watches contribute 32% to Richemont’s full-year 2025 sales, U.S. market exposure is estimated at just under 10% of overall sales.
Swatch: The U.S. accounted for 18% of Swatch’s 2024 sales. The company has already implemented a 5% price increase following initial tariff announcements in April.
What this Means for You
If you’re a consumer considering a Swiss watch purchase, you might see price increases or limited availability of certain models in the U.S. market. It’s a complex situation, and the long-term effects remain to be seen.
Looking Ahead
The industry is closely monitoring the situation, hoping for a swift resolution to the tariff dispute.Though, for now, the outlook remains uncertain, and the Swiss watch industry is preparing for a challenging period. It’s a reminder of how interconnected global trade is and how quickly external factors can impact even the most established industries.
Ultimately,the resilience of Swiss watchmaking will be tested,and the coming months will reveal how brands adapt to this new reality.
