Swiss watchmakers are anxiously awaiting the outcome of US-Switzerland tariff talks that could determine the future of their industry. Starting July 1, Swiss watch exports to the US risk facing a steep 31% tariff unless a deal is reached before then.
Simon Lazarus, head of content at Chrono Hunter, said the tariffs put the international watch trade in a fragile position, “balanced delicately on a horological tightrope” while awaiting President Trump’s decision to reverse, pause, or escalate the import duty.
The US is Switzerland’s largest watch market, accounting for about 17% of total shipments. This makes it crucial for the industry’s health.
Switzerland was singled out by Trump as a major offender of unfair trade, with the US running a CHF 38.5 billion ($41 billion) trade deficit with the country last year.
As demand in China has cooled and shows little sign of recovering, luxury brands are increasingly relying on the US to support falling sales. For Watches of Switzerland Group (WOSG), a major distributor of brands like Rolex, Omega, and Patek Philippe, the US represents about 45% of its demand.
WOSG’s share price fell more than 22% from April 2 to April 5 and remains down 8% as of mid-May.
Analysts warn that brands might have to raise prices due to tariffs but may struggle to do so. Lazarus noted that post-pandemic demand pushed luxury watches to sell at three to four times retail price. Adding a 30% tariff would hurt both retailers and consumers.
At a Geneva press conference, US Treasury Secretary Scott Bessent highlighted that Switzerland and the UK are prioritized for trade deals, unlike the slower-moving EU.
The UK recently secured a trade deal with the US after facing a 10% tariff increase.
Swiss Finance Minister Karin Keller-Sutter said talks with the US have made progress and that a deal proposal will come within two weeks. However, she cautioned it is too soon to say the industry is safe without a signed agreement.
If no deal is reached, Lazarus expects a shift toward the pre-owned luxury watch market as new imports become too costly. He pointed out that savvy buyers may turn to the secondary market to avoid long waits and high prices for brands like Patek Philippe and Rolex.
The pre-owned watch market is growing rapidly, outpacing the new watch market. Deloitte forecasts it could match the primary market’s size within a decade, driven mainly by younger buyers, higher new watch prices, and easier access through digital platforms.
WOSG itself is expanding its certified pre-owned division, expecting revenues of £3.3–3.4 billion by 2028.
Even without a tariff deal, the pre-owned market is set to grow, but if talks fail, its growth is likely to accelerate sharply.
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