Switzerland’s prestigious watch industry is under pressure after the United States announced steep new tariffs. A 31% levy on Swiss goods is expected to hit hard, particularly in the luxury watch sector.
Known for its political neutrality and cautious stance on European integration, Switzerland now faces one of the highest tariffs in Europe. The nation’s top business federation has criticized the move, calling it “harmful and unjustified.”
The new tariffs will affect many key Swiss exports—from cheese and chocolate to pharmaceutical products. But watches may be the most vulnerable. The U.S. is the largest export market for Swiss timepieces, making this trade link especially vital.
In 2024, Swiss watch exports to the U.S. rose by 5%, reaching CHF 4.3 billion (about $5.2 billion). As demand from China has weakened since the COVID-19 pandemic, Swiss watchmakers have increasingly relied on American consumers to drive sales.
Richemont, the group behind luxury brands like IWC and Jaeger-LeCoultre, has seen this shift in its latest sales figures. But moving production away from Switzerland is not a simple option. Much of the craftsmanship and expertise in high-end watchmaking is centered in the country.
Top-tier watchmakers like Patek Philippe, Audemars Piguet, and Richard Mille are expected to weather the tariffs more easily. These brands have strong margins and loyal customer bases. They may absorb some of the cost increases or pass them along to buyers with little impact.
However, brands that serve mid-range customers could face greater challenges. Pierre-Yves Donzé, a professor of business history at Osaka University and a watch industry expert, explained the likely impact.
“Exclusive luxury brands can reduce their profit margins slightly and raise prices,” Donzé told Fortune. “But mid-range and smaller luxury brands—especially those where price matters more—will be hit hard. I’m thinking of Swatch Group in particular, which is already under pressure.”
Swatch Group owns a wide range of brands, including Omega, Tissot, and Swatch. Its portfolio spans various price levels. But the company has been struggling, especially with falling demand in China. Last year, its net sales dropped by 14%.
New tariffs could drive prices higher for some of its watches in the U.S., making them less affordable for many buyers.
The last time the U.S. imposed tariffs on this scale was nearly a century ago. The Smoot-Hawley Act of the 1930s introduced sweeping trade barriers. Many historians believe it helped trigger the Great Depression.
Back then, Switzerland responded by boycotting American goods. That decision caused a sharp decline in international trade and deeply affected export-heavy industries like watchmaking.
“This kind of tariff can hurt trade and industries that depend on global markets,” said Paul Altieri, CEO of Bob’s Watches, a major U.S. dealer of secondhand and certified pre-owned Rolex watches.
Altieri believes the secondhand market may benefit from the disruption. As new watches become more expensive due to tariffs, more consumers could turn to pre-owned options.
“If tariffs slow down the new watch market, the secondhand market could become a refuge,” he said. “Collectors and savvy buyers might shift to pre-owned models. That could reshape the luxury watch industry.”
There are already signs of change. Robertino Altieri, CEO of WatchGuys.com, said he noticed shifting buyer behavior after the tariff announcement.
“One client offered to sell me a Rolex GMT-Master II ‘Pepsi’ for $19,350. But he backed out at the last minute,” Altieri said. “He told me he wants to wait. He thinks the watch could be worth 10–20% more soon. That’s $2,000 to $4,000 added in value—just based on speculation.”
Still, Donzé warns that not all pre-owned watches will benefit. “The secondhand market only favors a few top-tier brands, like Rolex, AP, and Patek,” he said. “Most other brands sell below retail because demand is lower.”
For most watches, he explained, secondhand prices are often lower than new ones. Only a handful of high-demand models sell for more.
Switzerland’s leadership has acknowledged the seriousness of the tariffs. President Karin Keller-Sutter said her government is preparing a formal response.
She emphasized that Switzerland remains committed to its long-term economic goals and trade values.
“Our country’s long-term economic interests are paramount,” she posted on X. “Respect for international law and free trade continues to be a core value.”
The impact of the new U.S. tariffs could be far-reaching. Luxury giants may be able to adapt, but mid-range watchmakers face greater risk. With the Chinese market still recovering, the loss of pricing power in the U.S. could create long-term challenges.
As Swiss watchmakers brace for uncertain times, many will look to the secondhand market for relief. Yet that market also comes with limitations.
One thing is clear: the tariffs mark a critical turning point for Switzerland’s flagship industry. How it responds could shape the future of Swiss watchmaking for years to come.
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