Swiss Watch Market Troubles: Trump's Looming Tariffs

Swiss watch retailers in Lucerne have experienced three challenging months after U.S. President Donald Trump threatened significant tariffs on the luxury sector, dampening tourist interest in the city known for its watch shops. Industry workers, including managers and salespeople, are feeling the strain as the sector, which exported 26 billion Swiss francs in 2024, grapples with tariff uncertainties.

Faced with weak Chinese demand and an inflated Swiss franc due to U.S. trade unpredictability, retailers find foreign tourist purchases even more difficult. Trump's April announcement of a 31% tariff shocked Switzerland, which relies on trade, surpassing the EU's proposed 20% rate. "That obviously really put the brakes on," commented Ken May, manager of a Hublot store.

Though Trump later delayed the tariffs for 90 days, maintaining a 10% duty and extending the deadline to August 1, Swiss exports have fluctuated. The Federation of the Swiss Watch Industry reports potential for the lowest wristwatch export volumes since 2020. Seeking new markets becomes crucial as Lucerne's main watch street sees reduced tourist numbers and more cautious spending.

(With inputs from agencies.)