Swiss watchmakers at their annual back-to-school gathering in Geneva have been placing a courageous face on President Donald Trump’s tariffs threatening their companies. That will change if their US stockpiles run out.
A surge in exports in July ought to spare watchmakers — at the very least within the short-term — from bearing the brunt of the 39 p.c levy imposed by the US final month on merchandise from Switzerland, and exhibitors have been typically upbeat about Swiss officers’ possibilities of getting a greater deal earlier than their wiggle room runs out.
“This must be solved, or partially solved within the following weeks or months. So let’s hold being optimistic,” Breitling AG’s Chief Govt Officer Georges Kern stated on the opening of the Geneva Watch Days assembly on Wednesday. “Everyone has backup plans and a few months of stock simply in case.”
The dimensions of Trump’s tariff on Switzerland, a part of his technique to revitalize US manufacturing, shocked the federal government in Bern which had anticipated a levy just like the 15 p.c negotiated by the European Union. As a substitute, exporters like Swatch Group AG and Cartier-owner Compagnie Financière Richemont SA all of a sudden confronted the very best charge imposed by the US on any developed economic system.
It comes at a tough time for luxurious watchmakers as geopolitical tensions and report gold costs weigh on demand. The US is the most important or second-biggest marketplace for most Swiss manufacturers, accounting for about 20 p.c of watch exports value 2.6 billion Swiss francs ($3.3 billion) within the first half of 2025, in keeping with the Federation of the Swiss Watch Trade.
The response from watchmakers was diverse. Grenchen-based Favre Leuba, one of many oldest manufacturers established in 1737, paused plans to enter the US market — a part of a technique to widen its buyer base past its stronghold in India — as quickly because the tariff charge was introduced, stated Chairman Patrik Paul Hoffmann.
“If the tariffs will keep in place longer than simply three to 4 months, the affect will probably be relatively substantial for the Swiss watch business,” he stated.
Others are pushing forward. ZRC 1904, identified for making the primary diving watch with a patented crown safety system that creates a watertight seal and prevents unintended flooding, is continuous with a plan so as to add retailers which began just a few months in the past regardless of the tariffs.
Export Enhance
Corporations speeding to get inventory into the US forward of the tariffs delivered a shot-in-the-arm to July’s export numbers, which have been up 6.9 p.c from a yr earlier. Excluding the US, although, exports would have dropped 0.9 p.c as shipments to markets like Japan and China underscored the business’s struggles.
Bloomberg Intelligence expects the downward export pattern to renew after the US stockpiling in July and early August.
Nonetheless, executives in Geneva, the place 66 manufacturers had arrange store in lodge rooms, cubicles and exhibition areas to show their merchandise, stated a lot is determined by what occurs with the tariffs.
Swiss commerce negotiators are nonetheless engaged on bringing down the levy. “We hope to discover a higher deal. The distinction with Europe is sort of stunning,” stated Delphine Bachmann, Geneva’s state councilor in control of the canton’s division of economic system and labor.
The Swiss delegation met US officers in Washington on Friday for extra commerce talks. In a put up on X, Swiss Vice President Man Parmelin described the conferences with Secretary of Commerce Howard Lutnick, Secretary of the Treasury Scott Bessent and Commerce Consultant Jamieson Greer as “constructive,” however didn’t present additional particulars.
In the meantime Watches of Switzerland Group Plc, the highest vendor of Rolex watches within the UK, additionally gave the business trigger for optimism despite the commerce friction. Buying and selling had been “persistently sturdy” notably within the US, it stated Wednesday in a monetary replace that triggered a spike in its shares.
“The final temper in Switzerland is that the state of affairs will enhance from what it’s immediately,” Chief Govt Officer Brian Duffy informed Bloomberg TV.
By Allegra Catelli with help by Zoe Schneeweiss and Levin Stamm.
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Finish Occasions for Swiss Watchmakers?
President Trump’s tariff on Switzerland, touchdown levies of 39 p.c on each watch the nation exports to the US, is an existential menace for some Swiss watchmakers.
