(Source: World Bank)
Switzerland is bracing for potential U.S. tariffs amid escalating global trade tensions, with the luxury watch sector — led by Rolex — closely monitoring developments.
While the country enjoys a stable trade relationship with the U.S. and remains outside the European Union’s disputes, the threat of tariffs on high-end Swiss timepieces is real.
Switzerland’s economy faces a bigger problem: its overwhelming reliance on exports. Switzerland’s export-to-GDP ratio dwarfs that of the U.S., China, Canada, Mexico and even Germany, according to a World Bank analysis. More than half of Switzerland’s outbound trade comes from pharmaceuticals, making it a prime target for Washington’s aggressive tariff policies.
For Rolex, the world’s largest luxury watchmaker, the likely strategy will be to pass any tariff-related costs directly to customers. Given its strong brand equity, Rolex may not even notice a drop in demand in the U.S. — its largest market — as demand far exceeds supply. Unlike other consumer goods, Swiss luxury watches have no direct substitute in the U.S. which may soften the blow.