US tariffs drive deceptive spike in Swiss watch exports

Business

Watch from the Swiss brand Rolex. Credits: Francis Bai, Unsplash.

Boosted by a surge in US demand, Swiss watch exports jumped by 18.2 percent in April 2025. However, this increase mainly masked the sector's deep concern about the new tariffs imposed by Washington.

A cyclical surge linked to US trade policy

The Swiss watch industry experienced a spectacular upturn in April 2025. According to data from the Federation of the Swiss Watch Industry (FH), exports rose by 18.2 percent compared to the previous year. This dynamic was mainly driven by the US, the number one export market for Swiss watches, which saw its imports explode ahead of a major regulatory change.

According to an AFP article published on May 27, 2025, Swiss watch exports to the US soared in April, jumping by 149.2 percent compared to the same period a year earlier. This exceptional peak was a direct consequence of fears surrounding the announced introduction of reciprocal tariffs of 31 percent by the US administration.

Without these massive shipments to the US, the FH stressed that Swiss watch exports would actually have fallen by 6.4 percent in April, reflecting a mixed, even lacklustre, trend in other markets. Indeed, while exports edged up slightly to the UK (plus 1.6 percent), France (plus 4.8 percent) and Japan (plus 1.9 percent), they fell sharply to China (minus 30.5 percent) and Hong Kong (minus 22.8 percent).

Since April 9, Swiss imports, including luxury watches, have been subject to a 31 percent tariff. This is part of a so-called “trade reciprocity” policy initiated by the Trump administration. The result was a massive influx of orders placed in advance by US retailers, in order to build up stocks before the entry into force of this protectionist measure.

“This increase in exports is artificial: it’s an anticipatory phenomenon, not a structural rebound in demand,” said an expert quoted by Reuters.

Pressure on the US market

With 4.37 billion Swiss francs of exports to the US in 2024, representing almost 17 percent of the sector's total, the American market is essential for Swiss watchmakers. The abruptness of the tariff increase caught an industry used to long cycles and relative commercial stability off guard.

Brands fear a sharp fall in US demand, particularly for mid-range models, which are especially sensitive to price increases. While major players such as Rolex, Omega and Patek Philippe have brand power that allows them to adjust prices without losing customers, the situation is more strained for independent or emerging brands.

“We have no other choice but to pass on these 31 percent on our selling prices,” said the management of British brand Christopher Ward, in a message to its US customers, reported by the media outlet Hodinkee.

Brands adapt urgently

Faced with this new situation, some brands have already initiated tariff adjustments on their online shops and US distribution networks. For example, Rolex announced an increase of 3 percent to 5 percent on several references from mid-April, reports Watch Analytics. Other groups are seeking to circumvent tariff increases through logistical transfers or direct negotiations with their partners in the US.

The context is reminiscent of the Sino-American trade tensions of the late 2010s, but here it takes an unprecedented turn for watchmaking, which has historically been little exposed to this type of measure.

Diplomatic negotiations underway

In response to these tensions, Switzerland has engaged in diplomatic negotiations with the US. In mid-May 2025, the president of the Swiss Confederation, Karin Keller-Sutter, and the minister of the economy, Guy Parmelin, met the US Secretary of the Treasury, Scott Bessent, and the Trade Representative, Jamieson Greer, in Geneva, on the sidelines of negotiations with China. These discussions resulted in a 90-day pause in the application of tariffs, opening a window for a lasting solution.

“We are calling for a balanced solution. Swiss watchmaking must not become a collateral victim of trade disputes,” said a spokesperson for the FH to Fortune Europe.

Potential long-term consequences to anticipate

Despite the April peak, the sector anticipates a more uncertain second half of 2025, threatened with contraction. The rise in prices could also favour American or Asian brands, and even boost the North American second-hand market, which is already booming.

The most agile brands could revise their establishment policy. For example, they could strengthen their local presence via assemblies or relocated distribution partnerships, similar to certain strategies already tested in the 2020s with China.

A case to follow for the whole of European luxury

This new protectionist episode is a reminder of recent tensions between Washington and the European Union, particularly over agri-food products, electric vehicles and strategic software. It illustrates the rise of a climate of commercial fragmentation that could affect, beyond Swiss watches, all European luxury industries heavily exposed to the US market: leather goods, haute couture, perfumery and jewellery.

Negotiations between Brussels and Washington are strained, with a deadline set for July 9. After this deadline, the threat brandished by Donald Trump could materialise, with the introduction of massive tariffs on European imports.

In a polarised and uncertain American electoral context, this tariff sword of Damocles is likely to be a lasting feature of the 2026 strategies of major European luxury groups, which sometimes generate up to 40 percent of their sales in the US.

This article was translated to English using an AI tool.

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