After months of tension that made Swiss watchmakers feel like they were walking on thin ice, the United States and Switzerland have finally reached a deal to ease their tariff war. The agreement will slash tariffs on Swiss watches from a hefty 39% down to 15%, giving the struggling industry some much-needed breathing room.
Swiss watchmakers can finally exhale as US tariffs drop from a crushing 39% to a more manageable 15%.
The original 39% tariff hit Swiss watchmakers like a sledgehammer. By September 2025, U.S. imports of Swiss watches had plummeted by an eye-watering 55-56%. Many brands were forced to raise prices or eat the costs themselves, leading to painful overstocks sitting in American warehouses.
For an industry where the U.S. represents about 20% of all shipments by value, this was devastating news.
While 15% might still sound steep, industry leaders are treating this reduction like a lifeline. The tariff cut means brands can avoid further price increases and start digging out from their financial hole.
However, experts warn that the relief may feel more like a band-aid on a bigger wound.
The Swiss watch industry isn’t just battling American tariffs. They’re facing a perfect storm of challenges including weak demand from China, soaring gold prices, and a strong Swiss franc that makes their products more expensive abroad.
Deloitte analysts describe this as one of the most complex periods in recent industry history.
The tariff war started when the U.S. grew concerned about trade deficits and wanted Switzerland to relocate more production to America. The dispute was triggered after a disagreeable phone call between Trump and Swiss officials earlier this year.
What began as economic negotiations unexpectedly dragged the watch industry into geopolitical drama, highlighting just how important these luxury exports are to Switzerland’s economy.
Industry groups didn’t sit quietly during this mess. The American Watch Association and Jewelers Vigilance Committee even filed a Supreme Court brief challenging the tariff’s legality.
Some Swiss regions considered short-time work schemes to help struggling workers. Swiss watch companies will need to monitor European market hours carefully as they navigate recovery strategies across different time zones.
While the deal won’t officially take effect until early 2026, it represents a “new dynamic” in diplomatic relations.
Market forecasters expect real improvements to become visible in the second half of 2026, though watchmakers know they’re not out of the woods yet.
