Watch Economic Observatory: Something strange is happening in the luxury watch market. Swiss watch exports continue to decline.

The unstable global economy is having a major impact on the luxury watch market. Swiss watch exports continue to decline, and the sharp decline in exports from the United States, which was once the top export destination, has completely transformed the market. Although the high tariffs imposed on Switzerland by US President Donald Trump have been eased, concerns about a slowdown in the Chinese economy remain, and uncertainty about the future remains. Leading economic journalist Tomoyuki Isoyama analyzes the current state and outlook for the luxury watch market.

Something strange is happening in the luxury watch market: Swiss watch exports continue to decline

　The global economy is in a state of flux, with outlooks still bleak. The International Monetary Fund (IMF) released its October 2025 global economic outlook, which, while slightly revised upward from its April forecast, predicts that global economic growth will remain sluggish. The outlook is heavily affected by U.S. President Donald Trump's significant hike in U.S. import tariffs, and there are also concerns about a slowdown in the Chinese economy due to economic conflict with the United States. Meanwhile, something strange is happening in the luxury watch market, which can be seen as an indicator of the future of the economy.

　According to Swiss watch export statistics released by the Federation of the Swiss Watch Industry (FH), exports in August were 1.6398 billion Swiss francs (approximately JPY 3197 billion), a 16.5% decrease compared to the same month last year. September exports were also down 3.1% to 1.9934 billion Swiss francs (approximately JPY 3886 billion). All of the top export destinations saw large declines in August, with the top-ranked United States seeing a 23.9% decrease, second-ranked Hong Kong seeing a 12.5% ​​decrease, and third-ranked China seeing a 35.6% decrease. In fourth place was the United Kingdom, and in fifth place was Japan, with exports to Japan falling 22.5%.

September was heavily impacted by Trump tariffs

The "anomaly" began in September, when exports to the US plummeted by 55.6% compared to the same month last year. The Trump tariffs, which imposed a high 39% tariff on Swiss imports, are believed to have caused exports to plummet. Negotiations then progressed between the US and Switzerland, and on November 14th, an agreement was reached to lower the tariff rate to 15%, provided that Switzerland invests $200 billion (approximately 30 trillion yen) in the US over five years. However, until the new tariff rate is implemented, Swiss watch exports to the US are expected to continue to decline significantly.

　As a result, the ranking of Swiss watch export destinations changed dramatically in September.

　The UK came in at the top with 173.3 million Swiss francs, followed by Japan in second place with 158 million Swiss francs, and the US dropping to third place with 157.7 million Swiss francs. It is extremely unusual for the US, which had been in first place for some time, to fall to third place. Furthermore, Hong Kong came in fourth and mainland China in fifth place. Although Chinese consumption appears to be recovering slightly, this has not led to an increase in consumption of luxury watches. Cumulative exports to China from January to September were down 16.3% year-on-year, and are now two-thirds of the level two years ago.

Dark clouds loom over Japan's luxury watch market

　The United States topped the list in terms of cumulative totals from January to September, followed by Japan. However, dark clouds are now gathering over Japan as well.

　The election of Sanae Takaichi as Prime Minister immediately sparked political friction with China. In response to her comments about Taiwan, the Chinese government issued a notice calling for Chinese nationals to refrain from traveling to Japan.

　According to estimates by the Japan National Tourism Organization (JNTO), the number of foreign visitors to Japan in September reached 326 million, a new record for the month, and the cumulative total since January has exceeded 30 million. In particular, the number of visitors from China (January-September cumulative) reached 748 million, a 42.7% increase over the previous year, continuing to set new records.

　It is clear that luxury watch consumption is driven by inbound spending by tourists visiting Japan, with Chinese tourists in particular spending far more on shopping than tourists from other countries.

　According to a survey estimate by the Japan Tourism Agency from July to September, of the estimated 5427 billion yen spent on shopping, 1941 billion yen was spent by Chinese tourists. While the average travel expenditure per person was 54,631 yen, the Chinese spent 75,237 yen, making them the top spender by any nationality.

"Asset preservation" by China's wealthy

　The purchase of luxury watches is thought to be more than just consumption, but also to preserve assets. Since the Xi Jinping administration, the government has tightened its grip on the wealthy, and some believe this is leading to asset flight overseas. The reason why wealthy Chinese individuals are buying high-rise condominiums in the bay area and buildings in Tokyo's Ginza district in Japan is not only because the weak yen makes Japanese real estate cheap, but also because they want to store their assets in a safe place where they won't be seized by the government. Some believe that the government's attempts to restrict visits to Japan are also aimed at preventing this kind of asset flight. Takaichi's comments are merely a justification.

　If this is the case, the influx of Chinese money into Japan will not be stopped so easily, even if the government calls for self-restraint. Luxury watches sold in Japan may also become increasingly expensive.