At this year’s Geneva Watch Days, Swiss watch executives struck an optimistic tone despite mounting pressure from the 39% tariff imposed by the US on Swiss-made goods in July. For the moment, strong export flows ahead of the tariff deadline have cushioned the industry, but concerns remain over what happens once American stockpiles begin to thin.
“Everybody has backup plans and some months of inventory just in case,” said Georges Kern, CEO of Breitling AG, adding that he expects progress in negotiations. “This should be solved, or partially solved, in the following weeks or months. So let’s keep being positive.”
The shock tariff, far higher than the 15% rate secured by the European Union, caught Bern off guard and left luxury giants including Swatch Group AG and Richemont SA scrambling to reassess their strategies. The US is a critical market, representing nearly 20% of Swiss watch exports, valued at 2.6 billion francs ($3.3 billion) in the first half of 2025, according to the Federation of the Swiss Watch Industry.
The industry’s response has been mixed:
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Favre Leuba, the Grenchen-based heritage brand, immediately shelved its plans to expand into the US. “If the tariffs will stay in place longer than just three to four months, the impact will be rather substantial,” said Chairman Patrik Paul Hoffmann.
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Others, such as ZRC 1904, known for its pioneering diving watches, are pressing ahead with expansion, adding new US retail partners despite the trade headwinds.
In July, exporters rushed shipments across the Atlantic, boosting Swiss watch exports by 6.9% year-on-year. Without the US, however, exports would have fallen 0.9%, reflecting softer demand in key Asian markets. Analysts at Bloomberg Intelligence expect the downward trend to resume once stockpiled inventory runs out.
Swiss officials are still seeking relief. Delphine Bachmann, Geneva’s state councillor for economy and labour, called the US-EU tariff disparity “quite shocking” and confirmed ongoing talks with US Commerce Secretary Howard Lutnick.
Yet, not all signals are negative. Watches of Switzerland Group Plc, the UK’s largest Rolex retailer, reported “consistently strong” US sales in a recent trading update, sparking a rally in its share price.
“The general mood in Switzerland is that the situation will improve from what it is today,” said Brian Duffy, CEO of Watches of Switzerland, reflecting cautious optimism that diplomacy—or demand—will help ease the strain on one of Switzerland’s most iconic industries.
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