**Swiss Watchmakers Face Uncertainty Amid US Tariffs**
Swiss watchmakers gathered in Geneva for their annual back-to-school event, maintaining a positive outlook despite the looming threat of President Donald Trump’s tariffs on their products. The 39% levy imposed last month has raised concerns, particularly if their stockpiles in the US begin to dwindle. However, a notable increase in exports in July has provided some temporary relief, allowing manufacturers to avoid immediate repercussions from the tariffs.
Georges Kern, CEO of Breitling AG, expressed optimism at the Geneva Watch Days meeting, stating, “This should be solved, or partially solved in the following weeks or months. So let’s keep being positive.” He noted that many companies have contingency plans and sufficient inventory to navigate the current challenges.
The unexpected scale of the tariffs, which far exceeded the anticipated 15% rate negotiated by the European Union, has taken the Swiss government by surprise. This has placed exporters like Swatch Group AG and Compagnie Financière Richemont SA in a precarious position, as they now face the highest tariff rate imposed by the US on any developed economy. The timing is particularly challenging for luxury watchmakers, as geopolitical tensions and soaring gold prices are already impacting demand.
The US market is crucial for Swiss watch brands, accounting for approximately 20% of watch exports, valued at 2.6 billion Swiss francs in the first half of 2025, according to the Federation of the Swiss Watch Industry. Responses from watchmakers have varied; for instance, Favre Leuba, one of the oldest brands, has paused its plans to enter the US market due to the tariffs. Chairman Patrik Paul Hoffmann warned that if the tariffs persist beyond a few months, the impact on the Swiss watch industry could be significant.
Conversely, ZRC 1904, known for its innovative diving watches, is continuing its expansion plans despite the tariffs. The rush to stock up on products before the tariffs took effect resulted in a 6.9% increase in July’s export figures. However, excluding the US, exports would have seen a decline of 0.9%, highlighting the ongoing struggles in markets like Japan and China.
Looking ahead, industry executives in Geneva emphasized that the future of the Swiss watch market largely hinges on the outcome of tariff negotiations. Swiss trade negotiators are actively working to address these challenges.
**FAQ**
**What impact do US tariffs have on Swiss watchmakers?**
The US tariffs, particularly the 39% levy, pose significant challenges for Swiss watchmakers, potentially affecting their market access and profitability if stockpiles run out.
