The Swiss government has prolonged its short-time work compensation scheme for the nation’s watchmakers, offering extended relief as the sector grapples with the effects of new US import tariffs.
Following the introduction of a 39% tariff on Swiss watches by the United States in August 2025, Swiss authorities confirmed that the scheme—originally designed as a temporary buffer—will now remain in place for up to two years.
Initially revived in early 2024 after a post-pandemic dip in demand, the compensation plan allows employers to reclaim 80% of lost wages for employees affected by reduced working hours. The initiative, first used widely during the Covid-19 crisis, was reintroduced after a global sales slowdown in late 2023 strained even top-tier watch brands.
Swiss watch exports took a notable hit in August, plunging 16.5% overall, with a sharper 23.9% decline in shipments to the US. The Federation of the Swiss Watch Industry (FH) described the results as “very negative, both in volume and value,” citing the dual pressure of declining orders and trade uncertainty.
Government officials said the decision to extend aid reflects ongoing instability in the global watch market, adding that “labor market forecasts do not suggest any recovery soon, while US tariffs continue to generate uncertainty.”
Analysts note that while some companies front-loaded exports before the tariffs took effect, most are now shifting focus to emerging Asian and Middle Eastern markets to offset potential long-term losses.
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