Shares in Swiss luxury watchmakers, including Richemont and Swatch, were volatile in early trade on Monday, underscoring the challenge the industry faces after U.S. President Donald Trump imposed a steep 39% tariff on Switzerland.
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 COVID-19 pandemic in 2020.
"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.
Shares in Richemont and Swatch were both down around 1% at 09:06 a.m. GMT, paring back losses after earlier falling as much as 3.4% and 5%, respectively.
Bertschy linked the move to hopes of Switzerland still getting a better deal as the tariffs are effective as of August 7. Swatch Group CEO Nick Hayek, meanwhile, called on Swiss President Karin Keller-Sutter
to meet Trump.
A separate report by Reuters said Switzerland's government would hold an extraordinary cabinet meeting on Monday to discuss its response to tariffs, which threaten to inflict heavy damage to its luxury goods industry. The duties are scheduled to go into effect on Thursday, giving Switzerland a small window to strike a better deal.
Switzerland was left stunned on Friday after Trump hit the country with one of the highest tariffs in his global trade reset, with industry associations warning that tens of thousands of jobs were at risk.
President Keller-Sutter told Reuters on Friday that Switzerland had given U.S. goods virtually free access to its market, and Swiss companies had made very important direct investments in the U.S.
"The president (Trump) is really focused on the trade deficit, because he thinks that this is a loss for the United States, that every year with Swiss exports, the United States loses, well, 38.5 billion (francs)," she told Reuters.
"Tariffs can change at any moment due to the unpredictability of the Trump administration," said Georges Mari, co-owner of Zurich-based investment firm Rossier, Mari & Associates, which holds shares in Swatch, adding that it is "impossible to make a serious forecast."
Monday was the first day of trading following the U.S. tariff announcement, as markets were closed on Friday for the Swiss National Day holiday. Stocks and the Swiss franc both tumbled in response to heavy levies.
An index of Swiss blue-chip stocks hit its lowest level since mid-April on Monday, as shares in banks, luxury retailers, and pharma companies dropped. The SMI index was last down 0.6% on the day, compared with a 0.6% rise in the regional STOXX 600 index. The Swiss franc was the worst-performing major currency against the dollar, which was last up 0.7% at 0.809 francs, not far off Friday's one-month highs.
The U.S. is Switzerland's leading foreign market for watches, accounting for 16.8% of exports worth about 4.4 billion francs, according to the Federation of the Swiss Watch Industry.
While Richemont generated 32% of its full-year 2025 sales in the watches category, its exposure to the U.S. market should be just below 10% of overall sales, analysts at Jefferies said.
Swatch, meanwhile, generated 18% of its 2024 sales in the U.S., with its CEO saying the company had raised prices by 5% following the first tariffs announcement in April.
