Swiss luxury watchmakers drop after Trump tariff shock

Swiss luxury watchmakers' shares, including Richemont and Swatch, were volatile in early trade on Monday, underscoring the challenges for the industry after U.S. President Donald Trump imposed a 39% tariff on Swiss imports.

The sector, which exported watches worth 26 billion Swiss francs ($32.79 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.

Shares in Richemont and Swatch were both down 0.8% at 0825 GMT, paring back losses after earlier falling as much as 3.4%, and 5%, respectively.

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

"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.

"We expect a strong negative impact for watches in the entry- to mid-price segments," he said.

The U.S. is Switzerland's leading foreign market for watches, accounting for 16.8% of exports worth about 4.4 billion francs ($5.45 billion), according to the Federation of the Swiss Watch Industry.

Shahzaib Khan, who runs a business exporting Swiss luxury watches, said many brands would not be able to deal with the 39% tariff rate.

"I suspect ... there won't be any goods being shipped to the U.S. until the situation clears," he said.

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.