Now that a 15% tariff on exports from Japan to the United States has been agreed upon, the real concern for those involved in the watch industry is the US tariff on Swiss watches, which will be imposed at an incredible rate from August. This is a major issue that will affect the survival of the Swiss watch industry and the livelihoods of those who work in the industry.
Text by Yasuhito Shibuya
[Article published on January 2, 2025]
Why?! The incomprehensible "39%" surpasses April's 31%.
On April 2, 2025 (local time in Switzerland), US President Donald Trump announced a tariff policy that hit the Watches & Wonders Geneva (W&WG) in the midst of its run, causing a pang of anger amongst the CEOs of watch brands. He arbitrarily and unilaterally announced that he would impose a 31% tariff on Swiss exports to the US. He then immediately applied a temporary 10% tariff.
Immediately afterwards, the Swiss government began negotiations, with President and Finance Minister Kellersutter in charge. Previous reports had suggested that after several months of negotiations, a joint declaration had been drafted and a settlement was imminent. But then, out of the blue, the situation suddenly reversed. They unilaterally declared that a 39% tariff, an extraordinarily high level compared to other countries, would be imposed, an additional 8% on top of the 31% tariff imposed in April.
For the Swiss government, this was likely a case of betrayal. According to articles by the Swiss Broadcasting Corporation's international media outlets SWI swissinfo.ch and Bloomberg, the finance minister had been in telephone conversation with the White House until shortly before the announcement, and a spokesperson for the Swiss Ministry of Finance responded to a news agency by saying, "These tariff rates deviate significantly from the draft Declaration of Joint Intent, which was the result of intensive discussions between Switzerland and the United States over the past few months."
On August 1, the Swiss Mem Industries Association, the largest trade association representing the machinery and electrical industry in Switzerland, issued a statement regarding the 39% US import tariffs on Swiss goods. In the statement, Chairman Stephan Brupbacher stated, "We are appalled. The negotiations to date have been thwarted by the US President's inconsistent decisions, which put tens of thousands of industrial jobs at risk." At the same time, the statement noted that, given the 10% depreciation of the US dollar against the Swiss franc since the beginning of 2025, the tariffs imposed on Switzerland will be several times higher than those of competing countries. As a result, exports to the US, which account for an average of 10-15% of the Swiss technology industry's orders, could disappear in the short to medium term. "Companies will be forced to relocate, for example to the EU, where tariffs are significantly lower, and many small and medium-sized enterprises will lose the US market entirely," he said.
Why would Trump, who is an avid watch lover, choose this?
Donald Trump and his family are known to be fans of Swiss luxury watches, especially Rolex, and members of the Trump family, including Trump Jr., are often seen in the media wearing Rolex watches. Secretary of State Marco Rubio, Trump's second-in-command, has reportedly stated, "If Trump hadn't inherited a fortune from his father, a real estate businessman, he'd probably be selling watches in Manhattan." Last year, Trump lent his name and signature to a series of MAGA code watches, including a $100,000 "Swiss-made" tourbillon with a gold case and bracelet. This led many in the Swiss watch industry to optimistically believe that Trump's love for watches might lead to something.
We managed to withstand the 10% tariff, but...
I occasionally check American watch sales websites, and it's just my impression that at this point, the selling prices of many luxury watches seem to be relatively unchanged from before the announcement of the mutual tariffs on April 1st.
Speaking with people involved during the W&WG, it appears that many Swiss watch brands rushed to ship their exports to the US. This is because, according to the Federation of the Swiss Watch Industry (FH), exports to the US in April 2025 reached 851.9 million Swiss francs (approximately 1.067 billion US dollars), up 149.2% from the previous year. In other words, watches worth approximately 2.5 times the value of those exported to the US in April of this year were exported to the US compared to 2024. Had there been no issues such as delays in customs clearance, these shipments would have been imported at a 10% tariff rate. The fact that price increases are not noticeable suggests that US corporations and distributors are selling inventory imported earlier, and that companies have absorbed the 10% tariff through their own efforts.
However, if the current "tariff bullying" is implemented unilaterally, it will be inevitable that sales prices in the US market will rise by around 20%. Oliver R. Mueller, a well-known marketing consultant for the luxury watch market, said in an interview with Bloomberg that "retail prices are likely to rise by 12 to 14%."
39% of the claims are unfounded and are an unlawful form of "tariff bullying"
But why did the tariff rate increase by 8%? The reason is unclear. To begin with, there is no sound basis for Trump's tariffs. Trump's reason for unilaterally imposing tariffs on other countries is to "reduce the trade deficit." However, anyone with a high school level knowledge of trade and international economics should immediately understand that the trade deficit is not due to the other country's misconduct. The first thing we need to address is "America, the importer."
The background to this "high 39% tariff" is said to be the Trump administration's "anger" over the approximately $630 billion deficit that has arisen from total imports from Switzerland of approximately $380 billion annually, with pharmaceuticals accounting for half of that. In other words, it could be said that the Swiss watch industry has suffered the consequences of the pharmaceutical industry.
However, according to Switzerland, its investment ranking in the United States is seventh in the world, which is by no means small. Moreover, in response to President Trump's complaints, Swiss pharmaceutical companies Roche Holdings and Novartis have pledged to invest approximately 700 billion yen in research and development in the United States. Even so, it seems the Trump administration was not satisfied.
Like the 15% tariffs on Japan, this is nothing more than incoherent "bullying" and will surely reduce sales of Swiss watches in the American market. The Trump tariffs have confused, angered, and shocked the world, but the Swiss watch industry has been the target of the worst bullying of all.
The Swiss stock market was closed on Friday, August 1st, which was a national holiday for Swiss National Day. Instead, on the London Stock Exchange, the share price of Watches of Switzerland, a major Rolex retailer chain, fell by 9.2%. When the Swiss stock market opened on Monday, August 4th, the share prices of watch-related stocks also fell across the board.
When will this unprecedented disaster end?
Even before the 39% Trump tariffs were implemented, Switzerland's export industry was already heavily impacted by the temporary 10% tariff. In May, exports to the United States plummeted 25.3% from the previous month to 2.68 billion Swiss francs (approximately $3.356 billion), the lowest figure since the end of 2020. Those in the Swiss watch industry likely feel as though they're being hit by an unprecedented natural (though actually man-made) disaster. In addition to the Trump tariffs, the industry is now battling another formidable enemy: the unprecedented rise in the Swiss franc's exchange rate. In late September 2025, the exchange rate against the yen reached a staggering 187 yen. While it currently sits at 184 yen, the weak yen and strong Swiss franc are certain to remain. This trend is highly likely to continue. This is truly adding insult to injury for the Swiss watch industry. An official at a Japanese import agency for Swiss watches told us, "We now need to assume that 1 Swiss franc is equal to 200 yen."
Two months have passed since the tariffs were imposed, and the situation remains as it is. The Swiss watch industry continues to face difficult times. However, given the lack of rational justification and the extent of the damage and confusion, it is entirely possible that the Trump administration's tariff policy will be suddenly changed, and the tax rate will be suddenly lowered, i.e., renegotiated to the same 15-20% as other countries. Even if this is the case, the impact and damage will be enormous. How long will these abnormally high tariff policies against Switzerland continue? How long can the Swiss watch industry endure this situation? All we can do is wait and see.
Author Profile
Shibuya Yasuhito
As an editor of a product information magazine, he began covering Geneva and Basel in 1995. He has been busy as both an editor and writer, and before he knew it, 2019 was his 25th year. He is currently planning, covering, editing, and writing about not only smartwatches, but also all kinds of things and events other than watches.
