Blog: You, us, everyone

The Swiss economy is experiencing a challenging phase, shaped by multiple overlapping structural trends.

Global slowdown

International demand is weakening, particularly in Europe and even more in China, where domestic consumption is struggling to rebound. For a country highly dependent on exports, this creates significant headwinds.

Rising costs of accessing major markets

As highlighted in the article, Switzerland now has to pay a high price to maintain privileged access to major global markets:

• Agreement with the United States ⇒ lower tariffs… in exchange for USD 200 billion in pledged investments.
• Free-trade agreement with India ⇒ USD 100 billion in investment commitments over 15 years.

Market access is becoming more conditional, more political, and more expensive.

Decline in inbound investment flows

Foreign direct investment (FDI) into Switzerland has been decreasing since 2018, according to UNCTAD data. This raises questions about the country’s economic attractiveness in an increasingly competitive global environment.

Resilience in the American relationship

In contrast, investment flows between Switzerland and the United States have remained relatively stable.

The Switzerland–United States Tariff Agreement: A Strategic Turning Point

The reduction of U.S. tariffs from 39% to 15% represents a major advantage for Swiss exporters. In exchange, Switzerland has committed to a massive volume of investments:

• USD 200 billion announced, including USD 67 billion in 2026.
• Participation from major Swiss multinationals: ABB, Stadler Rail, Roche, Novartis.
• Commitments still far from being fully funded, but politically significant.

Even if the final investment amounts are not fully achieved, this agreement provides an immediate competitiveness boost for exporting companies.

⌚️ Impact on the Swiss Watch Industry (Swatch Group, Richemont, etc.)

The watch industry is one of Switzerland’s most iconic and most export-dependent sectors.

A highly export-driven industry

Around 95% of Swiss watch production is exported, with significant shares going to:

• the United States (the #1 or #2 market depending on the year),
• China,
• Europe.

Lower U.S. tariffs therefore represent a direct driver of growth.

Immediate potential winners

Brands with the strongest exposure to the U.S. market stand to benefit the most:

• Swatch Group (Omega, Longines),
• Richemont (Cartier, Piaget, IWC).

For Swatch Group specifically:

• The U.S. is a strategic market for Omega and Longines.
• Tariff reductions improve margins.
• Commercial visibility increases in an uncertain global environment.

💡 Investment Recommendation: Why Swatch Group Is Attractive

✓ A positive tariff lever in a key market

The reduction of U.S. tariffs from 39% → 15% strengthens the competitiveness of Swatch’s flagship brands.

✓ Strong positioning in the premium-demand recovery

Premium mechanical watches remain one of the luxury sector’s most dynamic segments. Omega and Longines are ideally positioned.

✓ Rare vertical integration in the luxury industry

Swatch controls the production of its components and movements.
 → Higher resilience, cost control, and margin protection.

✓ Solid liquidity and attractive valuation

Swatch shares typically offer a more attractive entry point than Richemont or LVMH in the watches & jewelry segment.

✓ The Switzerland–U.S. agreement acts as a catalyst

It provides:

• margin enhancement,
• potential volume expansion in the U.S.,
• greater cash-flow visibility,
• medium-term support for valuation.

Conclusion

Swatch Group stands out as a natural beneficiary of the economic agreement with Washington and offers exposure to the resilience of the U.S. luxury market, while providing a stock with meaningful re-rating potential.