Prices of Swiss watches could face a rise after the imposition of higher tariffs

Swiss companies of different sectors are preparing for the financial impact of the latest tariffs imposed by the Trump administration. Swiss watch manufacturers and exporters are facing possible price rises and demand impacts following the 39% tariff (since April, the tariff had been 10%) imposed on Switzerland, one of the highest tariffs in place.

The tariffs are expected to enter into force next week, generating tension amongst companies such as the manufacturers The Swatch Group (owner of Omega, Tissot, Breguet, and Blancpain) and Richemont (owner of Vacheron Constantin, Jaeger-LeCoultre, Panerai), and dealers such as Watches of Switzerland (dealer of brands like Rolex and Patek Philippe).

The companies would be forced to increase the prices of their products in response to the tariffs, which could ultimately impact consumer inflation and the financial results of the companies. However, manufacturers commented that they are working on mitigating the impact on clients

The effects of the measures are already visible. Bloomberg reports that shares of Watches of Switzerland have fallen 22% in the last 12 months, while the Financial Times reports a 18% fall in Swiss watches’ exports compared to one year earlier.

Switzerland exported $61 billion to the US during 2024, making it the 17th largest trading partner. However, the trade balance between the countries is negative for the US, making it a target in the plan of “securing fair, balanced, and reciprocal trade relationships”, according to the White House. 

The Swiss government regretted the decision, but informed that they are working on a negotiated solution, despite not having reached an agreement in past talks. For the Alpine country, the effect of this measure could be highly detrimental, since the US is the main trade partner. Just in May, exports from Switzerland plummeted 39%, affecting industries such as the pharmaceutical, watch manufacturing, chocolate and coffee, among others.