Swiss Watch Exports Slump as U.S. Tariff Volatility Bites

The United States, a critical pillar for luxury horology, saw exports plunge 14% at the start of the year. Analysts from Citi, including Thomas Chauvet and Alberto Cecchetto, attributed this decline to extreme tariff-driven volatility that began in late 2024. The sector remains sensitive to trade tensions following President Trump’s decision to impose a 39% tariff on Swiss goods last summer, which was subsequently lowered to 15% to align with European Union rates.

Divergent Growth in Asian Markets

In contrast to the North American slump, demand in Asia showed signs of stabilization. Shipments to Hong Kong rose 2.6%, while exports to mainland China increased by 5%. This rebound is significant given that Chinese consumers—traditionally the engine of the luxury market—had significantly curtailed spending amid domestic economic headwinds. Bernstein analysts noted that these figures suggest market confidence is beginning to return, pointing toward a gradual recovery for the industry.

The path forward remains uneven as the industry navigates currency fluctuations and high interest rates. Vontobel analyst Manuel Lang suggested that while global monthly data will likely remain volatile through the first half of the year, the underlying demand in China appears solid. Lang expects the trend to turn more consistently positive as 2026 approaches, provided the current momentum in the Far East holds.

The Swiss watch sector continues to face a trifecta of pressures:

• Persistent currency headwinds affecting export pricing.
• Fluctuating trade barriers in major Western markets.
• A structural shift in luxury consumption patterns globally.