Swiss Watch Exports Get a Tariff Break from the US
Swiss watch exports, a cornerstone of the national economy, have been significantly impacted by the 39% tariffs imposed by the United States. However, recent developments offer a glimmer of hope, with a proposed agreement between Bern and Washington aiming to reduce these duties to 15%, potentially providing much-needed relief for watchmakers navigating a challenging global landscape.
The severity of the tariffs was starkly evident in recent export data. In October, Swiss watch exports to the United States plummeted by 46.8% compared to the previous year. This followed an even sharper decline of 55.6% in September and a 23.9% drop in August, the month Washington initially levied the 39% tariffs. These tariffs raised considerable concern across the industry, particularly given the strict "Swiss Made" criteria, which mandates in-country production and is a globally recognized symbol of quality and tradition.
A breakthrough emerged after Economy Minister Guy Parmelin's three trips to Washington, resulting in a draft agreement to reduce the tariffs to 15%. While certain details, especially concerning the watch industry, are still being finalized, the news has already generated palpable excitement. Manuel Emch, CEO of watchmaker Louis Erard, reported an immediate surge in orders, with "all my retailers without exception" placing orders within 24 hours. His brand, which derives approximately a quarter of its sales from the US, now faces the urgent task of implementing a comprehensive production and logistics plan to meet this sudden demand ahead of the crucial Christmas sales period, having not been able to build up stock in the US previously.
The United States stands as the primary foreign market for Swiss watchmaking, accounting for nearly 17% of total exports. The anticipation of increased tariffs earlier in the year led many watchmakers to proactively build up stock in the US. This strategic move temporarily inflated export figures, with a 149.2% increase in April and a 45% rise in July, before inevitably collapsing in August once the tariff hike was officially announced.
Industry leaders have voiced their relief over the prospective tariff reduction. Elie Bernheim, CEO of Raymond Weil, expressed his satisfaction that the industry is "back to a less punitive tariff," anticipating a significant improvement in Swiss exports to the US in the coming weeks. Edouard Meylan, head of luxury brand H. Moser, acknowledged that while going "from 39% to 15% clearly eases the pressure," it doesn't eliminate other existing challenges, but crucially provides "more breathing space" and "allows us to look at this strategic market with greater clarity."
These tariff developments unfold against a backdrop of what auditing and consulting firm Deloitte described in early October as "one of the most complex periods in its recent history." The sector is grappling with weak demand in China, surging gold prices, and a strong Swiss franc, in addition to the US tariffs. Jean-Philippe Bertschy, an analyst at Vontobel, concurs that while the tariff easing offers "a little breathing space," pressure on manufacturers and suppliers will remain high over the coming quarters, with a significant improvement not expected until the second half of 2026.
Across all global markets, Swiss watch exports contracted by 4.4% in October, reaching 2.2 billion Swiss francs (2.3 billion euros). While the US market faced a significant downturn, other key markets presented a mixed picture. China saw a recovery for the second consecutive month, with exports rising by 12.6% in October. Hong Kong also experienced growth of 2.4%, though Japan recorded a decline of 5.6%. In Europe, the UK was down by 7.4%, while France and Germany demonstrated positive growth of 10.8% and 3.9% respectively.
