Amid U.S. Tariff Hikes, Swiss Watch Exports see a Steep Drop in May, After April’s Spike

Swiss watch exports have experienced a significant decrease in May, experiencing a 9.5% fall to CHF 2.1 billion in comparison to the same period a year ago. This follows a price increase due to U.S. tariff imposition, prompting retailers to stock up on expensive timepieces beforehand. The Federation of the Swiss Watch Industry also reported declines in exports to key markets, including the U.S., Japan, mainland China, Hong Kong, the United Kingdom, and France. Despite a moderate 1.1% year-to-date rise compared to 2024, the Federation issued an atypical warning that the actual sales condition is less affluent than the results suggest. Jean-Philippe Bertschy, Vontobel Analyst and Head of Swiss Equity Research, noted that such a cautious statement from the Federation is unusual and raises concern about a slowdown this year. He also pointed out that while the fall in U.S. imports is attributable to the tariffs, downfalls in other markets are a growing concern. An economic slowdown in China due to a real estate crisis has resulted in U.S. accounting for a record high 21% of total Swiss watch exports. The May export data indicates declines in nearly all price categories, including timepieces with wholesale prices above 3,000 francs. Brands’ trend towards producing fewer, expensive watches, which have been a key contributor to value gains, are also affected. Amidst trade negotiations between the U.S. and Switzerland, President Donald Trump initially threatened a 31% tariff on Swiss imports, inclusive of watches, before reducing it to a 10% levy. This is likely to have attributed to the fluctuations in Swiss watch export patterns over the past couple of months.