US Tariffs Chip Away at Swiss Watch Exports

Swiss watch exports experienced a notable decline in September, primarily attributed to the Trump administration's imposition of a 39% tariff on imports from Switzerland to the United States, which remains the industry's largest market. The Federation of the Swiss Watch Industry reported a 3.1% year-over-year fall in watch exports, totaling 2 billion Swiss francs ($2.5 billion). While most other markets saw increases last month, these gains were overshadowed by a significant downturn in shipments to the US.

The US market specifically witnessed a steep 55% plunge in exports, marking the second consecutive monthly drop following a surge in July. This earlier spike was a strategic move by producers, who rushed to build up inventory in anticipation of the impending tariffs. The current decline indicates the immediate and substantial impact of the trade measures on the crucial American market.

Major industry players, including conglomerates like Richemont and Swatch Group AG, alongside independent luxury watchmakers such as Audemars Piguet, Patek Philippe, and Rolex SA, have all been affected by the US levy. This particular tariff stands out as the highest imposed by a developed nation globally. Interestingly, had the US market been excluded from the calculations, Swiss watch exports would have demonstrated robust growth of 7.8% last month, underscoring the disproportionate influence of the American tariffs.

Analyzing the decline by product category reveals that steel watches were particularly hard hit, registering a 3.8% decrease in value. The downturn was not confined to a single price point, as timepieces sold for more than 3,000 francs and those retailing for less than 500 francs both experienced declines. In contrast, mid-priced watches showed resilience, with exports in this segment seeing a 4.2% increase during September.

Despite the specific challenges faced by the watch industry, Switzerland's overall exports to the US rebounded in September. This broader trend suggests that, for many Swiss goods, demand is thus far withstanding the impact of the tariffs. The Swiss government continues its efforts to negotiate with Washington for a lower tariff, though the prospects of a successful resolution remain uncertain. While Commerce Secretary Howard Lutnick had previously expressed optimism about a potential deal, there has been little indication of concrete progress since his statement.