The 39 percent US import tariffs announced in August 2025 represent more than just a trade escalation. They act as a catalyst, accelerating a fundamental reordering of the global luxury landscape and forcing the Swiss watch industry to rethink its very foundation.
When the US government announced in early August 2025 that Swiss goods would henceforth be subject to a 39 percent import tariff—a significantly higher rate with no further room for negotiation—the immediate reaction was a mixture of disbelief and a certain bewilderment. The United States has been the most important single market for Swiss watches since 2021. With a volume of CHF 4.4 billion in 2024, America is the gravitational center of an industry that has oriented itself toward the transatlantic axis for decades. These tariffs represent a fundamental questioning of this alignment.
The Pull-Forward Effect and Its Limits
The announcement triggered a predictable reaction: brands and their American retail partners filled their warehouses before the tariffs took effect. It was a classic pull-forward scenario: securing what would be sold in the coming months while it was still accessible. But this strategy merely postpones the problem. The real question is how to operate in the long term in a market that has suddenly become 39 percent more expensive.
Waning Appetite: The American Consumer
The data suggests that American purchasing appetite is waning. The Financial Well-Being Index fell from 105.5 in late 2024 to 98.6 in June 2025. This is not a collapse, but a signal that the sentiment is shifting. Furthermore, the secondary market is hit just as hard. Every watch of Swiss origin is subject to the 39 percent as soon as it enters the US, making prices unstable and speculative.
Shifting Currents: China and the Rise of New Centers
While the US dominates the headlines, the situation in Asia is changing in a way that is less dramatic but possibly more lasting. China, once the engine of the industry, is faltering. Exports fell by 26 percent in 2024. The question is no longer when China will return, but whether it will return in the form the industry once knew.
New Energy in the South and East
As traditional markets face pressure, new centers are emerging. India has become the fastest-growing major market, driven by an urban elite that understands luxury as an expression of self-realization. Mexico, too, shows remarkable growth. The Mexican consumer is digitally savvy and design-loving, preferring special editions that reflect local culture and identity. We are moving toward a polycentric geography where each market operates by its own rules.
The Industry’s Response: Premiumization and Control
The industry is responding with a flight to the very top. Watches with a retail price of over CHF 50,000 continue to gain value. The logic is simple: the buyer who can afford a six-figure watch thinks in terms of exclusivity and long-term value retention rather than percentage markups.
Verticalization as a Strategic Shield
Parallel to this is the verticalization of the value chain. Major players are increasing control over their suppliers—from shock-absorber specialists to component manufacturers. In a world of unpredictable external shocks, owning the entire process—from the screw to the store—is a vital strategic advantage.
The Chronic Burden of the Franc
While tariffs are the acute problem, the strength of the Swiss franc remains a chronic burden. It has impacted the attractiveness of the domestic market, as international tourists now prefer to shop in Paris, London, or Dubai. For exporters, the strong franc means margins shrink before tariffs even come into play.
What Follows: A New Global Order
The Swiss watch industry is a seismograph. We are seeing a transition from Pax Americana to Pax Multipola. The future belongs to those who embrace agility, diversify their presence, and maintain absolute control over the honesty of their craft
