Exterior view of the Breitling Swiss luxury watch store on New Bond Street, Mayfair, London, UK, February 17, 2025.
John Keeble | Getty Images News | Getty Images
The CEO of Swiss luxury watchmaker Breitling told CNBC that the 39% tariff imposed by US President Donald Trump on Swiss products is “terrible” for Switzerland.
“These (tariffs) were terrible news. A 39% tariff is terrible,” Breitling’s George Kahn said.
“Swiss politicians were not adequately prepared,” Khan told CNBC’s Carolyn Ross, adding that the government did not seem to understand how to negotiate with the Trump administration’s “businessmen.”
Prices for Breitling luxury watches have increased by 4% globally to compensate for tariff costs, with the average price rising from $4,300 to $7,200.
In August, the White House imposed a 39% trade tariff on Swiss exports to the United States, citing Switzerland’s large trade surplus with the United States as the main reason for the increase. The Swiss government refrained from retaliation and chose to continue negotiations with the US government. A trade agreement has not yet been concluded.
According to the Swiss Watch Industry Federation, Swiss watch exports fell by 16.5% in August compared to the same month last year following President Trump’s tariff announcement. Similarly, Barclays said in an October note that Swiss watch exports fell 3.1% year-on-year in September.
Typically Switzerland’s largest export market, the decline was almost exclusively due to the United States, which saw exports fall by 56% after surging in April and July linked to expectations of U.S. tariffs. During the same period, exports to the UK and Japan exceeded exports to the US.
A luxurious recovery?
The CEO acknowledged that the market was in “tough” conditions, citing the “very long-term crisis” facing the luxury goods sector, fueled by a post-pandemic recession, inflation and a slowdown in China’s economy.
Kahn, who accounts for only 4% to 5% of Breitling’s sales, said he was surprised by the company’s recent sales growth in China.
“China has become more positive in recent months. I think the downward trend has stopped and it has stabilized.”
Luca Sorca, Bernstein’s managing director of global luxury goods, agreed, saying that “China’s demand is gradually improving,” and told CNBC, “Assuming this continues into the fourth quarter of 2025, this is consistent with a U-shaped recovery scenario for Chinese demand.”
But he cautioned that he expects luxury watches to be “under pressure for some time.”
“Watches are something people don’t buy often,” he says. “Most people who wanted to buy a watch did so during the post-COVID-19 boom in 2021, 2022, and early 2023.”
Breitling’s George Kahn dismissed suggestions of a broader luxury watch recession.
“The US is really booming,” he said, adding that consumer sentiment was “very positive.”
He also described the Middle East as a “booming environment” with “very strong” sales and said he was “confident” that consumer sentiment would improve following the Gaza ceasefire agreement.
The company is also recording increased demand in markets such as Indonesia, Malaysia and the Philippines, as well as across South and Latin America, supported by strong demographic trends.
Khan remained bullish on the sector’s long-term prospects, citing human optimism and the enduring emotional appeal of luxury goods.
