China–Switzerland Free Trade Agreement: Tariffs on Swiss Watches Fall to Zero Over Ten Years
China will phase out its tariffs of 4 to 8 per cent on Swiss watches over as many as ten years under the revised China–Switzerland free trade agreement. Xi Jinping and Guy Parmelin, the Swiss president, signed it in Beijing on 30 October.
● In brief
Watches. Under the agreement in force since 2014, only about 1 per cent of Swiss watch exports entered China free of tariffs. The revised deal is meant to raise that to 100 per cent, with cuts phased in over periods of up to ten years, depending on the product.
The agreement. About half of Swiss exports to China currently enter free of tariffs. That will rise to 77.5 per cent when the revised agreement takes effect and to 99.8 per cent once the transition periods end. Bern estimates savings for exporters at about SFr244m a year, mainly for makers of watches, machinery and pharmaceuticals.
The market. Swiss watch exports to China fell 14.2 per cent in September, according to the Federation of the Swiss Watch Industry. China, the industry’s second-largest market at the end of 2024, had fallen to sixth by mid-2026.
Next steps. Both countries must still approve the agreement. In Switzerland the decision rests with parliament, and the Greens have said they are prepared to launch a referendum against it.
● Why it matters
Switzerland is securing access to China for the next decade at a time when much of the luxury industry regards the market as weak.
The weakness is real. At LVMH, demand from Chinese customers for fashion and leather goods fell by a percentage in the mid-teens in the third quarter, and spending in mainland China fell by a double-digit percentage. Hermès reported flat sales in Greater China for the first nine months, with lower footfall in its stores. Among Swiss watch export markets, China has fallen from second to sixth in eighteen months.
But it is not the whole picture. The Hurun China Rich List counted a record 1,529 people worth more than 5bn yuan this year, and their combined wealth rose 7 per cent to $4.8tn. Luxury groups are still investing in China: Hermès opened a store in Beijing’s Sanlitun district in April, and Zegna will stage its summer 2027 show in Beijing, where it opened its first store in mainland China in 1991. The wealth is still there; the spending has slowed.
A trade agreement is measured in years, not quarters. This one phases in its tariff cuts over as many as ten years, well beyond the current slowdown. The US cut its tariff on Swiss goods from 39 to 12.5 per cent in July, after a year in which Swiss watch shipments there halved. In China, access for Swiss watches will improve under a treaty. Bern says it is the first trade agreement China has signed with a legally binding chapter on labour and environmental standards.
Two tests come next. The Swiss parliament will decide whether the agreement takes effect, and the watch federation’s October figures, due in the second half of November, will show whether shipments to China have stopped falling.
Send this to someone who follows where Swiss watches are sold next.
Continue · The reading
Luxury Watch Market 2027
The brands make fewer watches and take over resale: where Swiss watchmaking is heading.
Read on →
Sources
- swissinfo.ch, Swiss and Chinese presidents sign free trade agreement, 30 October 2026: swissinfo.ch
- Montres de Luxe, La Chine va supprimer les droits de douane sur les montres suisses, November 2026: montres-de-luxe.com
- Econostrum, 99,8 % des exportations suisses vers la Chine à terme sans droits de douane, October 2026: econostrum.info
- cash.ch, Fast alle Zölle auf Schweizer Exporten nach China werden fallen, 20 August 2026: cash.ch
- Federation of the Swiss Watch Industry, export statistics for September 2026, via Jing Daily, 21 October 2026: jingdaily.com
- The Standard, DeepSeek’s Liang Wenfeng debuts in 7th place on Hurun China Rich List, 27 October 2026: thestandard.com.hk