Approximately one year has passed since Donald Trump became the 47th President of the United States. President Trump has been pushing through his policies with heavy-handed tactics, including a military attack on Venezuela in early 2026, threatening the order of the global economy. This has had a significant impact on the luxury watch market, and even the US market, which had been steadily rising, is now showing signs of decline. On the other hand, the Japanese market remains strong and is increasingly prominent. Why do luxury watches sell so well in Japan? Will this upward trend continue? Leading economic journalist Tomoyuki Isoyama analyzes the situation.
Economic journalist and professor at Chiba University of Commerce. Born in Tokyo in 1962. Graduated from the School of Political Science and Economics at Waseda University. Served at the Nikkei Inc. as a securities reporter, deputy chief of the same department, Zurich bureau chief, Frankfurt bureau chief, and deputy editor-in-chief and editorial committee member for Nikkei Business. Left the company in 2011 to go independent. Covers a wide range of political, government, and business figures. His books include "The International Accounting Standards War: Final Chapter" and "The Secrets of Switzerland, the Brand Kingdom" (both published by Nikkei BP).
[Tomoyuki Isoyama Official Website]http://www.isoyamatomoyuki.com/
Text by Tomoyuki Isoyama
Mikio Ando: Illustrations
Illustration by Mikio Ando
[Article published in the July 2026 issue of Kronos Japan]
Swiss watch exports struggle, a sign of global economic turmoil.
The world continues to be at the mercy of US President Donald Trump. In 2026, he sent troops to Venezuela early in the year, detaining President Nicolás Maduro and bringing him to the United States, shocking the world. Since then, he has continued to provoke opposition from European countries by claiming sovereignty over Greenland. Furthermore, he has ruthlessly imposed tariff increases on countries that resist his policies, employing heavy-handed tactics that hold their economies hostage.
The global economy has been at the mercy of President Trump since his inauguration in January 2025, and his methods of imposing particularly high tariffs have had a significant impact not only on financial markets but also on the movement of goods through trade. This is particularly evident in the world of luxury watches, where exports of Swiss watches are in extreme disarray.
According to the Federation of the Swiss Watch Industry (FH), Swiss watch exports peaked at 26.7483 billion Swiss francs (approximately 5.37 trillion yen) in 2023, but fell to 25.9931 billion Swiss francs (approximately 5.216 trillion yen) in 2024, the first year-on-year decrease in four years. It appears that this downward trend will continue in 2025. As of the time of writing, the cumulative total from January to November is 23.4433 billion Swiss francs (approximately 4.67 trillion yen), a 2.2% decrease compared to the same period last year. In addition, eight of the top ten export destinations saw a year-on-year decrease.
Swiss watch exports to China have decreased significantly.
The largest decline was seen in shipments to mainland China, down 12.7%, reflecting the significant deterioration of the Chinese economy. In particular, the collapse of the real estate bubble has caused a sharp drop in consumption, and purchases of high-end goods by the wealthy remain sluggish.
China's consumer price index for 2025 is projected to be 0.0% compared to the previous year, the lowest level since 2009 when it recorded a negative figure due to the impact of the Lehman Shock. This sluggish consumption is fueling deflationary concerns in China. With asset prices unlikely to rise under deflation, demand for luxury watches as an investment has plummeted. Furthermore, the practice of using luxury watches as gifts to government and corporate executives has largely disappeared due to the Xi Jinping administration's anti-corruption campaign. Swiss watch exports are estimated to have fallen by about 4% compared to their peak in 2021.
Meanwhile, exports of Swiss watches to Hong Kong, once a free trade city and gateway to mainland China, have also declined sharply since peaking in 2010. While it had long held the top spot for Swiss watch exports, it has now fallen to fourth place.
Exports to the US are slowing sharply, while exports to Japan are surpassing those to China.
A major change towards the end of the year is the sharp slowdown in exports to the United States, which had been performing well. Swiss watch exports to the U.S. in November alone fell by 52.3% compared to the same month last year. This is largely attributed to the tariffs imposed by President Trump. Cumulative exports from January to November fell by 2.1%, and it is highly likely that the year-end total will also be negative.
As a result, there has been a significant change in the cumulative figures from January to November. While the US remains the number one export destination for Swiss watches, the sharp decline in exports to China has caused exports to Japan to surpass China, which was previously second. If Japan maintains its position as second place for the year, its importance to Swiss watches will increase.
The boom in travel to Japan has led to an increase in inbound tourism spending.
The backdrop to this trend is the boom in tourism to Japan. The number of tourists visiting Japan is at an all-time high, and spending by these tourists, known as inbound tourism spending, is booming. Watches are often purchased duty-free by tourists, making them one of the highlights of inbound tourism spending.
Considering these factors, it seems likely that Swiss luxury jewelry brands will open more directly managed stores in Japan in the future.
On the other hand, the Chinese government has deepened its conflict with Japan following Prime Minister Sanae Takaichi's remarks on the Taiwan issue and has called for people to refrain from traveling to Japan. While there are signs of a significant decrease in group tours, demand for travel to Japan, particularly among the wealthy, remains high. The question is how the number of Chinese tourists, who support watch consumption, will develop in the future. It's not just the number of tourists, but how the influx of wealthy Chinese tourists will affect sales of luxury watches in Japan that will likely influence this trend.
With rising stock prices leading to an increase in the value of assets held by wealthy individuals in Japan, the so-called wealth effect continues, and demand for luxury watches in Japan is expected to remain favorable.
