What's Happening?
Swiss watch exports experienced a significant decline in November, dropping 7.3% compared to the previous year. This marks the fourth consecutive month of decline, largely attributed to the anticipation of a U.S. agreement to ease punitive import tariffs. The Federation of the Swiss Watch Industry reported that exports to the U.S., a major market for Swiss watches, fell by 52% last month. The decline follows the imposition of a 39% levy by President Trump's administration on Swiss products, which was later reduced to 15% as of November 14. However, companies only learned in December that the reduced tariffs would be retroactively applied. Despite the tariff reduction, the 15% levy remains significantly higher than the previous 2% rate. The overall
export figures for Swiss watches were down across various price bands and materials, with notable declines in exports to Japan and China.
Why It's Important?
The decline in Swiss watch exports highlights the broader impact of international trade policies on luxury goods markets. The U.S. tariffs have created a challenging environment for Swiss watch manufacturers, affecting their largest market. The reduction in tariffs to 15% offers some relief, but the higher rate compared to pre-tariff levels continues to pose challenges. This situation underscores the volatility and unpredictability of international trade relations, particularly under the Trump administration's trade policies. The luxury watch sector, already facing challenges from changing consumer preferences and economic uncertainties, must navigate these additional hurdles. The situation also reflects broader trends in global trade, where tariffs and trade agreements significantly influence market dynamics and business strategies.
What's Next?
As the tariff reduction takes effect, Swiss watch exports are expected to recover in the coming months. Analysts suggest that the reassurance provided by the tariff deal will encourage companies to increase exports to the U.S. However, the luxury watch sector enters 2026 with mixed prospects. While comparisons in Asia may ease, the U.S. market remains unpredictable, and discretionary spending in Europe shows signs of fatigue. Companies will need to adapt their strategies to these evolving market conditions, potentially exploring new markets or adjusting pricing strategies to maintain competitiveness.
