Tax Relief: US Drops Swiss Watch Tariff to 15% 

If ever there was an industry which needed to end 2025 with some good news, it’s the watchmaking one. 

It has been the year from hell for the sector, with the majority of the hurt falling on Switzerland. The tariffs imposed on European luxury imports into the US—by some distance the largest market for Swiss watches—caused shockwaves through the country. Predictions of doom and gloom were rife, with massive price rises for consumers forecast and the expectation of major shortages on the most in-demand models.

However, November saw a fresh round of negotiations slash the tariff rate and some semblance of normality restored. It has indeed been an unpleasant rollercoaster of a year, so let’s unpack it all in a bit more detail and see exactly where we are now.

The Tariffs in a Nutshell

Say what you will about President Trump and his election promises, but POTUS did make the levying of aggressive tariffs on imports from foreign nations the center point of his campaign in 2024. In fact, on more than one occasion he described ‘tariffs’ as his favorite word! The idea was to ‘level the playing field’ against countries which had, in his words, been ‘ripping off’ America for years.

Sure enough, in April during Watches & Wonders Geneva, the news came through that there would be a 31% tax levied on Swiss watch imports into the States, later reduced to a flat 10% across the board. As if that wasn’t disruptive enough, on Switzerland’s National Day, August 1^st, a new tariff rate of an astronomical 39% was announced and implemented a week later.

The result was as tumultuous as it was predictable. The rumors surfacing ahead of time caused a massive increase in sales into America as consumers and dealers raced to buy stock before the price rises, only for post-tariff imports to crash through the floor. September saw a 56% fall in exports from Switzerland into the country compared to last year.

Additionally, most of the bigger Swiss brands were forced to raise prices three times throughout the year. The first came before any of the tariff announcements in January due to general inflation, a record gold price slightly north of $2,600 per ounce and a strong Swiss Franc. The second rise came in April and May with the news of the new 10% tariff, and finally, with the 39% August proclamation, several manufactures including Breitling, Patek and Omega increased their prices by between 5% and 15%.

Interestingly though, a number of brands, including Rolex, elected to stand firm in August and not bump rates—perhaps happy to gamble on the idea these tariffs were more a temporary threat than permanent promise.

That decision appears to have been vindicated. On the November 12^th, the Swiss economy minister flew in for an emergency meeting in Washington, the result announced two days later that a reciprocal agreement had been reached. Essentially the 39% tariff would be reduced to 15% in exchange for a reduction in import duties into Switzerland for American ‘industrial products, fish and seafood’ including agricultural products from the US that ‘Switzerland considers non-sensitive’ (whatever that means). In addition, Swiss companies will make direct investments into the States amounting to $200 billion by the end of 2028.

So, All’s Well That Ends Well?

There’s no doubt this is all good news for the watch industry. The new tax is at the so-called ‘most favored nation’ rate and has been the reason for a great deal of relief in the Euro enclave. 

As always though, there are complications. Firstly, while the 15% tariff is now considered effective retroactively from November 14^th 2025, the underlying trade agreement needs to be worked into a fully binding treaty by March 31^st 2026, otherwise the US could theoretically revisit the arrangement. As of now, that is yet to happen.

Another potential wrinkle is on those brands which raised their prices in response to the original 39% tax. With that no longer in effect, those marques are under pressure to bring their rates back down again to pre-tariff levels. And reducing prices is something no luxury business enjoys. 

Whether or not that happens is open to question.

And the last snag concerns Rolex. The most famous watchmaker of them all has found itself dragged into a political feud it no doubt would have liked to avoid over all this. Democrat Senator Elizabeth Warren allegedly wrote to Rolex CEO Jean-Frederic Dufour enquiring as to whether he was trying to ‘curry favor’ after President Trump was invited into the Rolex mid-court box during the US Open Tennis Championships in September. Dufour has vehemently denied any accusation of trying to ingratiate the president, as have the leaders of other companies such as Apple and Nvidia who faced similar charges.

However, Dufour did meet with Trump a second time in November when he gifted the POTUS a golden Rolex table clock, bringing further political indignation.

But whether the CEO was intentionally point-scoring or not, the upshot seems to be a happy resolution all around. Hopefully 2026 will be an altogether smoother year for the Swiss watch industry.