A Rolex shop in Lucerne, April 2025.
Keystone / Urs Flueeler
Switzerland’s watch industry is facing a threat to sales after Donald Trump said he would impose 39% tariffs on the country, raising the prospect of significantly higher prices in one of its biggest markets.
The elevated levy will push prices up for US consumers and hit volumes at some brands, analysts warned. The US accounted for 16.8% of Swiss watch exports in 2024, worth roughly CHF4.4 billion ($5.4 billion).
External Content
Swiss manufacturers The Swatch Group and Richemont, as well as London-listed Watches of Switzerland, a big Rolex and Patek Philippe dealer, all face “pain” if tariffs kick in next week as planned, Jefferies said.
At 39%, the levy exceeds the 31% proposed by Trump on “liberation day” in April, and far outstrips the 15% facing Switzerland’s EU neighbours. Even at the lower rate, some retailers previously said they would need price rises “in the mid to high teens” to preserve US gross profit, according to Jefferies.
Watches of Switzerland shares fell 8% in London trading on Friday. The company said it would “continue to work closely with our brand partners to mitigate any potential impact”.
More
More
Swiss government reacts with ‘great regret’ to new US tariffs
Brian Duffy, chief executive, said the tariff level was “a shock” but insisted the business was better positioned than some rivals, with its wealthy customers, many of whom wait years for chosen timepieces, able to bear higher prices.
“Half our business is in the US and half is waiting lists. It impacts us less than others,” he added. “Demand for watches still exceeds supply.”
The company – which had already warned investors of the impact of tariffs, saying last month that some of the brands it sells had already raised prices in the US – will try to bring forward orders and ship stock earlier to beat the changes.
However, it is limited by how much stock is on hand, and Duffy acknowledged that watches “could get more expensive” in the US.
Barclays warned that even high-end brands such as Rolex and Patek Philippe – which deliberately limit supply to boost desirability and value – may struggle with such steep tariffs, while “non-supply-constrained brands will find substantial price increases more difficult” and risk volume declines.
The tariffs compound existing issues for Swiss watchmakers. The weaker dollar – down roughly 5% against the Swiss franc since mid-2024 – had already made Swiss watches more expensive for American consumers. June export data showed Switzerland’s watch exports to the US were down 18% on a year earlier.
More
More
Swiss watchmakers feel pinch amid luxury slump
Swiss watch exports have been weakening overall, declining by 2.8% to CHF26 billion in 2024 – the first annual drop since a pandemic rebound in 2020.
Vincent Subilia, head of Geneva’s chamber of commerce, warned that “the US consumer will unfortunately have to pay the price” of what he labelled an “irrational” US tax policy.
Oliver Müller, founder of LuxeConsult, which advises the watch industry, said Swiss watchmakers were “perceiving the punitive new custom duties […] as being particularly unfair, because we are not threatening any US-based industry […] Apart from a few niche watch brands, the US watch industry disappeared a long time ago.”
Additional reporting by Adrienne Klasa in Paris
Copyright The Financial Times Limited 2025
