Swiss luxury watchmakers drop after Trump tariff shock

SWISS luxury watchmakers' shares, including Richemont CFR.S and Swatch UHR.S, were volatile in early trade on Monday, reflecting the challenge for the industry after U.S. President Donald Trumpset a 39% tariff on Swiss imports.

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The US imposed a 39% tariff on Swiss watches, hitting a sector already weakened by global demand and currency strength.
Shares in Richemont and Swatch fell as exports to the US-Switzerland's top watch market-are expected to drop sharply.
Analysts warn the tariffs could devastate mid-range brands, with some exporters halting shipments until clarity returns.

The sector, which exported watches worth 26 billion Swiss francs ($33 billion) in 2024, is already under pressure from a stronger franc and falling global demand.

Watch exports are on track to hit their lowest levels since the pandemic in 2020.

"The impact of the U.S. tariffs, if they stay at 39%, could be devastating for numerous brands in Switzerland," said Jean-Philippe Bertschy, an analyst at Vontobel.

Shares in Richemont and Swatch were both down around 1% at 0906 GMT, paring back losses after earlier falling as much as 3.4%, and 5%, respectively.

Bertschy linked the move to hopes of Switzerland still getting a better deal - the tariffs are effective as of August 7.

Swatch Group Chief Executive Nick Hayek called on Swiss President Karin Keller-Sutter to meet Trump.

"Tariffs can change at any moment due to the unpredictability of the Trump administration," said Georges Mari, co-owner of Zurich-based investment firm Rossier, Mari & Associates, which holds shares in Swatch, adding that it is "impossible to make a serious forecast".

Monday was the first day of trading following the U.S. tariff announcement, as markets were closed on Friday for the Swiss National Day holiday.

The U.S. is Switzerland's leading foreign market for watches, accounting for 16.8% of exports worth about 4.4 billion francs, according to the Federation of the Swiss Watch Industry.

While Richemont generated 32% of its full-year 2025 sales in the watches category, its exposure to the United States market should be just below 10% of overall sales, analysts at Jefferies said.

Swatch, meanwhile, generated 18% of its 2024 sales in the United States, with its CEO saying the company had raised prices by 5% following the first tariffs announcement in April.