Switzerland Announces Price Increases on Luxury Watches. "We Don't Produce in China"

Geneva was in uproar. Donald Trump announced 39 percent tariffs on all Swiss goods exported to the United States . This is the highest rate in Europe and one of the highest in the world. The decision dashed any remaining hopes for a neutral trade agreement. Instead of a diplomatic handshake, Switzerland received a massive blow to its most recognizable export sectors. The list included: watches , chocolate, cheese, gold… and many other symbols of Swiss craftsmanship.

Economic Storm in Switzerland. Is Donald Trump to Blame?

On April 2nd—so-called "Liberation Day" —President Trump introduced the first wave of "reciprocal tariffs." Switzerland initially received 10 percent, later announcing a 31 percent rate. No one fully believed the ominous announcements. Ultimately, however, a drastic 39 percent rate has been in effect since August 7th .

The reason? Officially, it was Switzerland's "surplus trade balance," which was expected to reach around $38.5 billion in 2024.

For comparison: the EU and the UK have negotiated much lower rates, around 15%.

The Swiss side called the decision " horrific " and claimed to have been caught off guard, despite promising talks and a lack of compromise at a crucial moment. In Geneva, fears arose about thousands of jobs and a possible GDP decline of 0.3-0.6%.

Luxury watches - the jewel in Switzerland's crown

The Swiss watch industry is no ordinary business. It's part of a national identity and tradition dating back to the 18th century . According to the Federation of the Swiss Watch Industry , in 2024 the US was the largest foreign market for Swiss-made products , accounting for 16.8% of all exports . The value? Approximately 4.4 billion Swiss francs.

" The 'Swiss-made' brand is part of our DNA. The history and experience of our industry are unique in the world," emphasizes Yves Bugmann, president of the federation, to Reuters.

Switzerland: "Prices will definitely go up"

What is Switzerland planning in connection with the new tariffs?

" We produce everything in Switzerland, not China. We have high costs. If we add a 39% tariff to that, we can't absorb it. Prices will definitely go up, " said Nick Hayek, CEO of the Swatch Group, which owns Omega, Tissot, and Longines, in an interview with Reuters.

The company raised prices by 5% after the April tariff announcements. Now experts predict that the increase in the US could reach as much as 12–22%.

Some manufacturers were racing against time. DuBois et fils , a company established in 1785, expedited deliveries from its Muttenz factory to meet the August 7 deadline.

But that's only a temporary reprieve. Amarildo Pilo, owner of Pilo & Co., estimates that, combined with a weaker dollar against the Swiss franc, the new tariffs will make US-made Swiss on average 65% more expensive .

"Americans will stop buying watches in the States. Those who love them will get them elsewhere. This will be a loss, above all, for the US," says Pilo, who is also behind the Swiss Pavilion of Independent Watchmakers, which brings together 28 brands for Reuters.

For Americans, luxury may become even more expensive. For the Swiss , this is the moment when they will have to decide whether to fight for their position in the US market or seek their fortune elsewhere.