NextFin news, on November 11, 2025, shares of Swiss luxury watchmakers Richemont and Swatch Group saw significant gains on the Zurich Stock Exchange after US President Donald J. Trump revealed that his administration was actively working with the Swiss government on a trade deal to lower the steep 39% tariffs imposed on Swiss watch exports to the United States. The tariffs, among the highest levied by the US in its international trade reset, were first announced by President Trump in late July and took effect on August 7, 2025. Early trading reflected renewed investor confidence with Swatch shares climbing 4.2% and Richemont shares up 2%.
President Trump, speaking from the Oval Office, stated, “We’re working on a deal to get their tariffs a little bit lower. I haven’t set any number, but we’re going to be working on something to help Switzerland.” Reports indicate a tentative agreement may see tariffs reduced to 15%, in line with the deal already struck with the European Union, although Swiss officials have remained reticent to confirm details. The largest market for Swiss watches, the US accounts for 19% of Swiss watch exports, underscoring the significance of this development for the Swiss luxury sector.
Tariffs of 39% have inflicted substantial pressure on Swiss watchmakers, elevating costs sharply for imports into the US and curbing demand. According to industry data, September 2025 saw a dramatic 55.6% plunge in Swiss watch sales in the US, although overall exports for the first nine months still rose 10.4% year-on-year, buoyed by pre-tariff stockpiling.
Brands under Swatch Group, including Omega, Tissot, and Longines, are more directly exposed to these tariffs due to Switzerland-originated exports comprising the bulk of their US shipments. Richemont's portfolio, with brands such as Cartier, IWC, and Piaget, has relatively more geographically diversified production, with significant outputs from Italy and France that partly mitigate tariff impacts.
The tariff imposition has forced Swiss firms to raise retail prices and adjust margins, pushing some consumers towards overseas purchases or non-Swiss alternatives. Analysts like Jon Cox of Kepler Cheuvreux reinforce that reducing the tariff to 15% would alleviate profitability pressures and potentially restore competitive pricing dynamics.
Negotiations reportedly intensified following high-profile meetings in the White House, including discussions with Richemont Chairman Johann Rupert and Rolex CEO Jean-Frédéric Dufour. The Swiss business community appears to have leveraged diplomatic engagement and symbolic gestures, such as gifting luxury watches and gold bars, to foster goodwill with the Trump administration. A letter of intent to resolve the dispute may be unveiled at the January 2026 World Economic Forum in Davos, potentially marking a significant milestone in transatlantic trade relations.
Beyond immediate market recovery, a tariff rollback could stabilize employment and production within Switzerland’s watchmaking hubs. Past tariff pressures had spurred concerns of relocation of jobs and operations to mitigate rising costs, as firms sought to regionalize production or shift assembly to tariff-favored jurisdictions.
The US luxury watch market's rebound is especially critical, constituting a substantial revenue share—an estimated 21% of Richemont's group sales and 15% for Swatch. The agreement may serve as an early indicator of US trade policy recalibration under President Trump’s administration in 2025, highlighting pragmatic flexibility after initial aggressive protectionist measures.
Looking ahead, tariff normalization could support Swiss watchmakers in reasserting leadership against competitors in Asia and other global markets. Improving tariff certainty also underpins longer-term strategic planning, pricing models, and market expansion initiatives. Nonetheless, watchmakers will likely continue monitoring evolving geopolitical and trade dynamics, including related issues such as gold refining regulations and bilateral trade balances.
In sum, the potential easing of US tariffs on Swiss watch exports signals a pivotal shift fostering renewed investor optimism, market stability, and profitability recovery for a cornerstone luxury industry facing acute cross-border trade challenges.
According to The Business Times and The Business of Fashion, this ongoing dialogue reflects a broader pattern of nuanced trade negotiations under the Trump presidency, balancing economic leverage with diplomatic engagement to support key bilateral trade partners like Switzerland.
Explore more exclusive insights at nextfin.ai.
