Shock of U.S. Tariffs Shakes Swiss Watch Industry

SadaNews - Shares of major Swiss luxury watch manufacturers, such as "Richemont" and "Swatch", experienced sharp fluctuations on Monday following U.S. President Donald Trump's announcement of a 39% tariff on Swiss watch imports to the United States, exacerbating the challenges facing this sector.

These developments come after Switzerland exported watches worth 26 billion Swiss francs (approximately 32.8 billion dollars) in 2024, but is facing increasing pressure from the strength of the local currency and a decline in global demand.

Estimates indicate that watch exports are on track to register their lowest levels since the COVID-19 pandemic in 2020.

At the beginning of trading, shares of "Richemont" fell by about 3.4% before trimming losses to 0.8%, while "Swatch" shares dropped by as much as 5% before also stabilizing at a decline of approximately 0.8% by 08:25 GMT. This marks the first trading day after the "Swiss Independence Day" holiday which occurred on Friday.

Jean-Philippe Bertschy, an analyst at "Vontobel", warned in comments to Reuters that the continuation of U.S. tariffs at this high level could be "devastating" for many brands, especially in the mid and low price categories, adding that the impact would be limited on the higher-priced luxury brands.

The United States is the largest foreign market for Swiss watches, representing 16.8% of total exports, worth nearly 4.4 billion francs (5.45 billion dollars), according to the Swiss Watch Industry Association.

Shahzab Khan, an expert in exporting Swiss watches, indicated that many brands will not be able to bear the burden of the new tariffs, confirming, "I do not expect to ship any goods to the United States until the situation becomes clearer."

Although the watch category accounted for 32% of "Richemont"'s sales during the fiscal year 2025, its exposure to the U.S. market is estimated to be less than 10% of total sales, according to analysts at "Jefferies".

As for "Swatch", it generated 18% of its sales in 2024 from the U.S. market, and it previously raised prices by about 5% following the initial announcement of the tariffs in April 2025.