The modest growth follows a sharp decline in April, a dip largely attributed to a base effect from the previous year when American importers rushed to stock inventory ahead of new trade levies. This see-sawing performance highlights the lingering impact of protectionist policies, though analysts at Bernstein suggest that the worst of the tariff-related distortions may be behind the sector. They note that American consumers have largely absorbed recent price hikes, keeping demand on a slow, steady path toward recovery.

Yet, the industry remains vulnerable to external pressures far beyond Washington. The conflict in the Middle East has disrupted critical tourist flows to Europe, a primary engine for high-end luxury sales. Simultaneously, surging energy costs and persistent inflation have dampened consumer confidence in China, where exports plummeted by more than 21%. While shipments to the Middle East show a slight moderation in the pace of decline, Vontobel analyst Manuel Lang warns that the region remains fundamentally fragile, leaving the watch sector to navigate a complex landscape of cooling demand and geopolitical uncertainty.