Swiss watch exports plummet after tariff uncertainty hits sales
Swiss watch exports fell significantly in May after anticipation of steep tariffs caused a downturn in the US market.
Exports fell 9.5 versus May, according to new figures from the Federation of the Swiss Watch Industry (FH), reversing a recovery in sales that has been brewing since the start of the year.
The market for mid-priced watches – between 500 and 3,000SWF (£455-£2,735) – remained steady, while the other main price segments dropped by 11.4 per cent on average.
The United States, which is the biggest global market for luxury watches, accounted for over 40 per cent of the global decline, with imports down 35.2 per cent.
Sales to Japan fell 10.5 per cent and sales to the UK fell 14.5 per cent.
President Donald Trump’s threat of 31 per cent tariffs on US imports from Switzerland appeared to be the driving force behind the slump, with the watch industry heavily reliant on the US.
Shares in Swiss watch sellers fall
Shares in Watches of Switzerland and Swatch both fell by just over two per cent in early trades.
City broker Peel Hunt downgraded the target price for Watches of Switzerland from 500p to 400p in April on tariff uncertainty.
“With uncertainty so high, we are not attracted to the shares even after their [April] fall,” Peel Hunt said.
Analysts warned that tariffs on Swiss exports could see watch prices rise by 10 to 15 per cent.
Vontobel analyst Jean-Philippe Bertschy added in a note that the “the rise of ‘luxury fatigue,’ a declining ‘feel-good factor’ from luxury purchases, and worsening consumer sentiment” all contributed to the drop.
RBC analysts expect 2025 to be a “slightly tougher year from an exports perspective” for Swiss watches, owing to US economic policy and normalising inbound tourism in Japan.
Analysts estimated exports would fall by seven per cent over the course of the year.