Swiss luxury watch exports soared by 18% in April, driven largely by a rush of shipments to the United States ahead of threatened tariffs. Total exports reached CHF 2.5 billion for the month, as Swiss watchmakers and American retailers scrambled to beat proposed import levies. Exports to the U.S. skyrocketed by 149% year-on-year, as companies front-loaded inventory in response to policy uncertainty. Although this exceptional surge masked underlying softness elsewhere, it marked the strongest monthly growth the industry has seen in years.
U.S.: Tariff Threat Triggers Record Imports
The United States, already the largest market for Swiss watches, saw an unprecedented spike in imports. Early in April, Washington imposed a 10% levy on Swiss watch imports, with the possibility of a 31% surcharge if no new trade deal was reached by July. That threat prompted American distributors to accelerate orders, sending shipments to a record CHF 852 million in April, nearly one-third of all Swiss watch exports that month. This front-loading effectively pulled forward sales that might otherwise have occurred later in the year.
U.S. retailers now report a more cautious consumer mindset. Facing higher prices—driven by tariffs, a strong Swiss franc and rising gold costs—American buyers have grown hesitant when it comes to big-ticket luxury purchases. Rising interest rates and softer economic sentiment have further eroded the “feel-good factor” that once fuelled luxury watch sales. Many leading brands are absorbing some of the tariff hit through thinner margins rather than passing the full cost on to customers, but this squeeze is unlikely to last indefinitely.
Canada: Steady Demand and Pragmatic Retailers
In contrast to the frenzied U.S. activity, Canada’s luxury watch market remained remarkably stable. For the first four months of 2025, Swiss watch exports to Canada rose a modest 2.0%, while April shipments were down slightly year-on-year. Canadian retailers did not engage in panic stockpiling, instead maintaining typical ordering patterns. Canada ranks only around 20th globally by Swiss export value, yet local demand for luxury timepieces has held up well despite global headwinds.
Retailers across Canada report healthy interest from affluent clients, supported by a strong job market and easing inflation. High borrowing costs continue to temper mass-market spending, so jewellers have become more strategic, focusing on iconic models and limited editions that retain value, and offering tailored boutique experiences. Major luxury groups are deepening their presence in Canadian gateway cities, signalling confidence in long-term growth.
Canada’s market has long lagged its southern neighbour in absolute sales, in part because Canadians historically purchased abroad for broader selection and tax-free benefits. However, with U.S. tariffs making Swiss watches pricier at home, there is an emerging opportunity for Canadian authorised dealers to capture cross-border spend. Retailers are positioning to welcome American clients by highlighting Canada’s duty-free advantages and ensuring ample inventory of sought-after models. Overall, Canadian demand remains consistent rather than subject to boom-and-bust swings.
Japan: Loyal Buyers in a Mature Market
Japan has emerged as another pillar of stability. Swiss watch exports there rose 1.9% in April and are about 1.2% higher year-to-date. Despite a weaker yen making imports more expensive, Japan remains the second-largest destination for Swiss watches by value. Buyers in Japan are highly loyal and view fine timepieces as long-term investments, helping to sustain steady sales.
Swiss brands have cultivated the market through flagship boutiques in Ginza and Osaka, and Japan-specific limited editions that cater to local tastes. Returning inbound tourism has also supported growth, as international visitors—particularly from China—take advantage of favourable pricing and tax regimes. Yet the core strength lies in domestic buyers, especially affluent middle-aged and senior consumers who value craftsmanship and tradition. While younger Japanese buyers have shown some caution amid talk of global recession, overall demand remains resilient.
Headwinds: ‘Luxury Fatigue’ and Economic Pressures
Despite regional nuances, the broader luxury watch industry faces common headwinds. After two years of exuberant post-pandemic growth, executives report a sense of “luxury fatigue” among aspirational consumers. Economic worries are dampening discretionary spending, and the emotional boost from status purchases has weakened.
Interest rates in North America remain elevated, and recessionary concerns have crept into forecasts. Europe contends with energy-driven cost pressures, while China’s uneven recovery and property-market woes have hurt luxury sales. Major watchmakers such as Richemont, LVMH and Hermès have all reported declines in timepiece revenues in early 2025. Together, these factors suggest the boom of 2021–2022 has given way to a more subdued environment, with single-digit growth—or even contraction—likely for the balance of the year.
Ongoing tariff negotiations between the U.S. and Switzerland add another layer of uncertainty. A stable bilateral deal could restore smoother flows; failure to reach one may entrench higher duties, pressuring U.S. retailers and potentially pushing Swiss brands to redirect inventory to markets such as Canada, the UK or Dubai. Such workarounds are limited, however, underscoring the importance of a reliable trade relationship for the industry.
Navigating a New Normal
The luxury watch sector finds itself at an inflection point. Backlogs for high-end models remain robust, signalling that true connoisseurs are still buying. Markets like Canada and Japan continue to provide dependable support, and any rebound in China would lift Asia’s performance. Innovation and new product launches, such as those at Watches & Wonders Geneva, also keep interest alive.
Yet the era of outsized growth has likely passed. Consumers are adopting more prudent spending habits, opting at times for pre-owned watches or premium smartwatches as alternatives. For Canadian jewellers, success will hinge on balancing inventory levels with market demand, leveraging e-commerce, and capturing any spillover from U.S. tariff-driven shifts.
If trade tensions ease and global economic sentiment improves, a gentle re-acceleration could emerge in 2026. If not, the industry may undergo a longer consolidation phase, supported by its most enthusiastic buyers and by markets—like Canada—that offer steady, quality-driven demand. In either scenario, Canadian consumers and retailers stand poised to play an increasingly pivotal role as the luxury watch world adapts to its new normal.
