Post-Tariff Slump in US Imports of Swiss Watches

Swiss watch exports to the US plunged by more than 55 per cent in September, in what the Federation of the Swiss Watch Industry Exports (FHS) described as a “huge correction”.

Foreign sales surged in the weeks before the US introduced a 39 per cent tariff on Swiss imports on 7 August, as manufacturers front-loaded shipments. 

Since then exports to the US have slumped, down by 23.9 per cent in August and now by 55.6 per cent in September.

“Without this expected but nonetheless extraordinary development, Swiss watch exports would have grown by 7.8%,” the FHS said in its latest update.

Hong Kong and China both saw a marked reversal of fortunes, from double-digit declines in August to double-digit increases in September. But that wasn’t enough to outweigh the US plunge.

Total Swiss watch exports fell by 3.1 per cent during the month to CHF 2.0bn (USD 2.5bn). The UK became the single biggest buyer, with imports up 15 per cent to CHF 173m ($218m), an 8.7 per cent market share.

The overall decline took cumulative exports for the first nine months of the year to CHF 19.0bn (USD23.9bn), an overall decline of 1.2 per cent. 

Source: DCLA

US Tariffs: Patek Philippe “to Hike Prices by 15%”

Patek Philippe will reportedly hike watch prices by 15 per cent tomorrow (Monday 15 September) in response to US reciprocal tariffs.

If confirmed, it will be Patek Philippe’s third price rise in the US this year, according to the WatchPro website.

Prices were increased in January because of soaring gold prices and the strength of the Swiss franc, and in April as a response to the US announcement of across-the-board tariffs.

Authorized dealers will also have their margins cut. Patek Philippe will be the first Swiss watchmaker to raise prices since the US introduced 39 per cent tariffs on 7 August.

Watchmakers rushed to export their goods ahead of the tariff deadline, resulting in a 6.9 per cent increase during July.

But price increases in the near future are almost inevitable as the reciprocal tariffs bite and stocks need replenishing.

One of the lowest-priced Patek Philippes, the $26,000 stainless steel Patek Philippe Aquanaut Ref. 5167A-001 (pictured) will cost $30,000 if the price increases take place.

Source: DCLA

Small Rise in US Watch and Jewelry Sales

The modest increase largely reflects a rush by exporters to get their goods into the US before the tariff deadlines and retailers stockpiling for the same reason.

It offsets low consumer demand, which is being compounded by ongoing anxiety over US reciprocal tariffs which are expected to force up prices.

Average monthly growth in watch and jewelry sales so far, for the first seven months of this year, has been around 0.6 per cent, compared to over 5 per cent last year.

Sales in June were down 0.9 per cent, a figure that has been revised up from the original -1.7 per cent, based on actual transactions rather than estimates.

Exports of Swiss watches were up 6.9 per cent, largely driven by manufacturers front-loading their shipments to avoid 39 per cent US tariffs.

Source: DCLA

Thousands of Swiss Watchmakers’ Jobs at Risk

Thousands of Swiss watchmakers are facing an uncertain future from 1 August, when the state-funded furlough program comes to an end.

Employers will have to find a way to pay their salary, or let them go.

The furlough scheme, widely used during the Covid pandemic, was never intended to meet such long-term needs as the ongoing decline in demand for luxury watches.

The industry has been relying heavily on support from the government, which has until now covered 80 per cent of furloughed workers’ salaries.

But a decline in global demand since the second half of 2023 shows little sign of recovery.

Smaller and mid-market brands are feeling the squeeze more than large, high-end brands such as Rolex, Patek Philippe, and may be forced to lay off staff.

Watchmakers avoid permanent job losses wherever possible, because of the difficulties in recruiting skilled workers when demand picks up.

Many watchmaking companies have put workers on short-time working even if they have been able to avoid temporary retrenchments.

Swiss watch exports were down 2.8 per cent by value in 2024, according to the Federation of the Swiss Watch Industry, with sales in China down by almost 26 per cent.

Last September we reported that Girard-Perregaux and Ulysse Nardin, (sold off by the Kering Group), had put 15 per cent of their workforce on short-time working and that 40 companies – mostly tool, machinery or component suppliers – applied for permission to cut their workers’ hours in Jura, one of Switzerland’s 26 cantons.

Source: DCLA