A Pressing Clock: Swiss Watch Industry Stares Down a 39% U.S. Tariff

The U.S. has sent shockwaves through the Swiss horological industry with the announcement of a staggering 39% tariff on Swiss imports. This unprecedented rate, almost triple the highest in the European Union, threatens to disrupt the luxury timepiece market, where the U.S. is a dominant player.Industry giants like Rolex and Audemars Piguet, alongside renowned names such as Omega, Vacheron Constantin, Oris, and Raymond Weil, now face exponentially increased levies and import costs into their largest market.

The impetus for these heightened tariffs came after the U.S. and Switzerland missed the deadline for a pivotal trade agreement. The proposed levies exceed even the 31% rate initially threatened against Switzerland by U.S. President Donald Trump back in April. They also surpass the 15% rate accepted by other key watchmaking nations like Germany and Japan.

These elevated tariffs, the highest in the developed world, could prove detrimental for an industry already grappling with a downturn in global demand due to the pandemic, coupled with a strengthening Swiss franc. With European and Chinese markets for Swiss watches diminishing, the U.S. market, which accounts for about 20% of the industry’s exports, has been a pivotal growth driver for Swiss watchmakers. Now, this crucial lifeline seems under threat.