Swiss watchmaker Swatch has made headlines with a playful but pointed gesture: a limited-edition watch dubbed “WHAT IF…TARIFFS?” that subtly mocks the 39 percent U.S. import tariff imposed on Swiss goods. The timepiece, with its face swapping the positions of the numbers three and nine to reference the 39% duty, isn’t just marketing — it’s a statement of economic distress and diplomatic demand.

The Tariff, the Watch, and What Swatch Wants

On August 1, President Donald Trump announced a 39% tariff on imports from Switzerland, excluding some sectors like pharmaceuticals. The measure came as a shock: Swiss authorities and businesses had expected a rate closer to what other countries receive, 10-15%, given longstanding trade ties. Swiss watch exports to the U.S. are especially significant — they generate several billion francs annually and account for a large share of the country’s luxury goods trade.

Swatch responded with what it called a “positive provocation” by releasing the “WHAT IF…TARIFFS?” watch, priced at CHF 139. The watch’s face has the digits three and nine reversed, a subtle nod to the 39% levy. It’s available only in Switzerland, and Swatch says it will cease its production and sales as soon as U.S. tariffs are revised. Stock sold out quickly, and the demand has resulted in delivery delays.

The move is meant as more than a publicity stunt. Swatch has said it hopes the watch will draw public attention and pressure the Swiss government to negotiate a better deal in Washington. For an industry that is export-dependent and vulnerable to price shocks, the tariff threatens margins, competitiveness, and market access at a time when global demand is shaky.

Impacts on the Watch Industry and Market Pressures

The U.S. is Switzerland’s largest export market for watches, accounting for roughly 16.8% of exports by value — around 4.4 billion Swiss francs in 2024. Many Swiss watch brands now face a sudden headwind: with the 39% import duty in force, prices on new output shipped to the U.S. are expected to rise significantly. Analysts estimate that to offset the tariff, prices may increase by double-digit percentages, particularly in entry- and mid-level segments, where margins are weaker.

Luxury brands (Rolex, Cartier, Patek Philippe, and their peer companies) are more insulated — they have higher margins, brand prestige, and core U.S. clientele willing to absorb price increases. Still, even these brands may feel ripple effects: higher import costs, reduced demand in price-sensitive segments, and disrupted inventory strategies.

Some Swiss watchmakers built up U.S. stock in advance when earlier tariff threats began. But this buffer is temporary. Independents and smaller brands with less financial flexibility are more exposed, and several firms have warned of layoffs or scaled-down operations if the tariff stays at 39% for long. Cantons with heavy watchmaking operations (in the Jura region, for example) are concerned about employment and economic spillovers.

Consumers in the U.S. are also likely to feel the pinch. For new Swiss watches, expect price hikes. For high-end or luxury models, less so — but selection may narrow and delays could grow. The secondary/pre-owned market is expected to benefit somewhat: existing stocks in the U.S. avoid the new duty, making pre-owned offerings relatively more attractive.

Diplomatic Stakes and What Comes Next

Swatch’s “WHAT IF…TARIFFS?” model is as much a diplomatic message as a design experiment. It puts pressure on the Swiss government to act and reminds the U.S. that trade policy has real consequences in strategic industries. Swiss negotiators have been in talks with U.S. counterparts; U.S. Commerce Secretary Howard Lutnick has expressed optimism that a deal might be possible.

The larger issue is what this tariff signals about U.S. trade policy: high and unpredictable. Swiss exporters say they were blindsided — originally expecting lower duties, then higher ones, until the final 39% rate. Many view this as part of a trend in Washington toward more aggressive tariffs and stronger bargaining tactics.

Swatch has emphasized that its protest watch is temporary. Once the U.S. modifies the tariff policy toward Switzerland, it will stop selling the model. That suggests Swatch sees the duty not only as an economic burden but as a policy decision that can still be influenced.

For Switzerland, this is a test of its diplomatic leverage. The watch industry is both culturally symbolic and economically significant. A strong Swiss response that secures tariff relief or carve-outs could preserve market share, protect jobs, and stabilize prices. Failure to alter the tariff could lead to long term loss of competitiveness, especially in segments where Swiss watches compete not only on craftsmanship but on attainable price points.

On the U.S. side, a high tariff rate may protect certain domestic industries or serve political goals tied to trade deficits. But it also risks antagonizing a key trade partner and prompting retaliation or shifting consumer behavior. If Swiss watches become significantly more expensive, consumers may buy less or turn toward alternatives — or rely more on pre-owned markets, reducing new sales.

(Adapted from CNBC.com)