U.S. Imposes a 39% Tariff on Luxury Timepieces Made by Rolex and Other Swiss Watch Manufacturers
The United States imposed a 39% tariff on imports from Switzerland in August 2025, marking one of the highest U.S. tariffs on Swiss goods ever imposed. This tariff, significantly higher than the previously threatened 31% rate, was enacted via an executive order by then-President Donald Trump.
This sharp tariff increase poses a serious threat to Switzerland’s key exports, especially its watch industry, which is a major segment of Swiss exports to the U.S. market. The Swiss government expressed "great regret" over the final tariff rate, highlighting that it diverged substantially from the draft trade framework that they had been negotiating with the U.S., signaling a breakdown or setback in those trade negotiations.
The impact on the Swiss watch industry is expected to be substantial. Higher tariffs increase the cost of Swiss watches in the U.S. market, potentially reducing demand and hurting Swiss watch manufacturers' revenues and competitiveness. The tariff escalation may put pressure on the Swiss government to restart or intensify negotiations with the U.S. to secure a more favorable trade agreement that can mitigate these punitive tariffs and ease market access for Swiss luxury goods.
The tariff applies to goods such as Rolexes, other Swiss watch brands, and chocolate. Over 1.3 million timepieces were exported from Switzerland in April, totaling $3 billion (2.5 billion Swiss francs). The new tariff has caused Watches of Switzerland's shares to drop by more than 7% to their lowest level in years.
In comparison, the European Union at large settled on a 15% levy for its countries this week, while the tariff imposed by the U.S. on goods from Britain is lower than the one on goods from Switzerland. The U.S. has also announced a 39% tariff on goods from Switzerland, effective August 7, while the United Kingdom reached a 10% tariff deal with the U.S. on goods.
Switzerland's President Karin Keller-Sutter spoke with President Trump on Thursday but could not reach a trade agreement. It remains to be seen if the Swiss government and the U.S. can reach a trade deal by next week. Guy Parmelin, Switzerland's economy minister, stated that Switzerland has been "especially mistreated."
The new tariff has been reported by The New York Times. The tariff escalation may put pressure on the Swiss government to restart or intensify negotiations with the U.S. to secure a more favorable trade agreement that can mitigate these punitive tariffs and ease market access for Swiss luxury goods.
- The sharp increase in tariffs on Swiss goods threatens not only the watch industry but also the entire Swiss business sector, particularly finance and technology industries that rely on trade with the U.S. market.
- The higher tariffs on Swiss goods could potentially affect the competitiveness of Swiss businesses in the U.S. market, including those in the finance, technology, and other industries, as manufacturers face increased costs and reduced demand for their products.
