In October, Swiss watch exports were again hit by the 39% tariffs imposed by the US, but a proposed agreement between Bern and Washington to cut them to 15% should give watchmakers some much-needed breathing space.

In October, Swiss watch exports to the United States fell by a further 46.8% compared with the same period a year earlier, following a 55.6% drop in September and a 23.9% decline in August, according to data from the watchmaking federation published on Thursday.

In August, Washington imposed 39% tariffs on imports from Switzerland, raising serious concerns for the watch industry, since watches must be made in the country to bear the “Swiss Made” label, widely regarded as a symbol of Swiss watchmaking tradition.

However, after three trips to Washington, Economy Minister Guy Parmelin returned to Bern at the end of last week with a draft agreement to reduce these duties to 15%, although certain details still need to be finalised, particularly for the watch industry.

Since then, Manuel Emch, CEO of watchmaker Louis Erard, has been inundated with calls. In less than 24 hours, “all my retailers without exception have placed orders,” the head of the brand, which generates around a quarter of its sales in the US, told AFP.

“And now we need to put an entire production and logistics plan in place to ramp up output,” he added, because “we’re in the home straight before Christmas,” with “a very short window of opportunity to satisfy a very sudden demand.” Unlike some of its competitors, the brand, which produces in small quantities, had not been able to build up stock in the US.

Relief

The US is the leading foreign market for Swiss watchmaking, accounting for almost 17% of exports. Anticipating an increase in tariffs, many watchmakers rushed to build up stock there, sending exports to the US up by 149.2% in April and 45% in July. These exports collapsed in August in the wake of the announcement of the US tariff hike.

“I’m relieved that we’re back to a less punitive tariff,” Elie Bernheim, CEO of Geneva-based Raymond Weil, told AFP, adding that “this will greatly improve Swiss exports to the US in the coming weeks.”

For Edouard Meylan, head of luxury brand H. Moser, “going from 39% to 15% clearly eases the pressure,” even if “it doesn’t make the other challenges disappear… but it does provide more breathing space,” which “allows us to look at this strategic market with greater clarity.”

In a study published at the beginning of October, the auditing and consulting firm Deloitte noted that the sector is currently going through “one of the most complex periods in its recent history,” amid weak demand in China, surging gold prices and a strong Swiss franc, as well as US tariffs.

According to Jean-Philippe Bertschy, analyst at Vontobel, this easing of tariffs will therefore give “a little breathing space” to watch manufacturers and their suppliers, he told AFP. But “pressure will remain high over the coming quarters, with an improvement expected in the second half of 2026,” he said.

Across all markets, Swiss watch exports contracted by 4.4% in October, to 2.2 billion Swiss francs (2.3 billion euros), according to the watchmaking federation. In China, they recovered for the second consecutive month, rising by 12.6% in October. They also increased by 2.4% in Hong Kong but fell by 5.6% in Japan. The picture was more mixed in Europe, with the UK down 7.4%, France up 10.8%, and Germany up 3.9%.