Swiss Watch Industry Shocked By Trump’s 31% Tariff Threat
The Swiss watch industry was sent reeling after US President Donald Trump threatened massive tariffs on imports to the biggest market for Swiss timepieces. In a speech Wednesday, Trump announced sweeping tariffs on more than 100 countries and trading partners, including China, India, and nations in the European Union. Trump showed a chart listing a levy of 31% on goods imported to the US from Switzerland.
Trump said tariffs of 10% would be imposed on all trading partners while “‘reciprocal” double-digit tariffs would be levied against a group of individual nations, including Switzerland. In comparison, Trump said the US would slap tariffs of 34% on Chinese goods, 20% on European products, 24% on Japan, and 10% on the UK. US stock market futures tumbled in response to the announcement.
The US has been the top destination for Swiss watches since overtaking China in 2021, and a 31% tariff would deliver a potentially shocking blow to an industry that has relied on US consumers following a post-pandemic global slump in demand. Swiss watchmakers from top prestige brands Rolex, Patek Philippe, and Vacheron Constantin, as well as high volume, lower priced marques including Longines and Tissot owned by Swatch Group AG, have leaned on the US to drive demand for Swiss watches as the once mighty Chinese market has faltered amid a real estate crisis.
Swiss watch exports to the US rose 5% by value in 2024 while shipments to China fell 25% in a year that saw overall wholesale exports decline 2.8% to about CHF 26 billion.
Switzerland’s President Karin Keller-Sutter said her government acknowledged the U.S. tariff decisions and would quickly decide its next steps. “The country’s long-term economic interests are paramount. Adherence to international law and free trade remain core values,” Keller-Sutter said in a post on social media site X.
The surprise tariff announcement came as the industry gathers in Geneva for Watches and Wonders, where 60 top brands unveil new products and meet with retailers and international media in a coordinated effort to promote the industry. Many Swiss executives at the event had hoped the watch sector would avoid being targeted by tariffs, as there is little mechanical watchmaking capacity in the US.
”We cannot make Swiss watches in the US,” Rolf Studer, the co-CEO of Swiss brand Oris, known for its approachable-priced tool watches, said in an interview ahead of Trump’s tariff announcement.
”Value creation is in the distribution, in the retailing alone, and if you would tax our products, then that would affect that value creation from a US point of view in their home market,” Studer added. “So I don’t think that this makes sense, even though that’s not a guarantee for it not to happen.”
Stay tuned for more as this story develops.
Hodinkee
