On August 1, the Swiss watch industry had a rude awakening to the reality of Trump’s aggressive tariffs. Expecting low tariff rates in line with other wealthy, luxury-producing countries like Japan and the E.U., Switzerland was hit with a 39% tariff on U.S. imports.
But last week, an overture by some of the most powerful business men in the Swiss watch industry successfully convinced Trump to lower the rate to 15%, on par with other European Union countries. For the Swiss, it was reason to breathe a sigh of relief. But now, the Swiss watch industry will still have to adjust to a new reality where prices in its largest market will inevitably have to rise.
Multiple experts Glossy spoke to for this story characterized the negotiation leading to a 15% tariff as lifesaving for the market. Fifteen percent is troublesome but manageable, they said, while 39% was potentially existential. Many Swiss brands, like Swatch, front-loaded inventory earlier this year, ramping up shipments to the U.S. before the 39% rates went into effect. The U.S. market accounts for nearly 20% of Swiss watch exports, far ahead of competitors such as China and Japan.
“Reaching a deal with the U.S. was crucial for the Swiss luxury watch industry,” said Perri Dash, host of the Wrist Check Pod podcast. “Swiss watch makers smartly prepared for tariff increases by shipping tons of products ahead of the deadline to lessen the chance and soften the blow of any kind of fallout. So, numbers should still be good by year’s end, with perhaps slower growth than anticipated but growth, nonetheless.”
Reports on how the negotiations went showed that they appealed to the president on an individual basis and involved a lot of gold. Rolex reportedly gifted Trump a gold desk clock, which has since been spotted in the Oval Office. Another Swiss brand reportedly offered an engraved gold bar. Trump was personally invited to the U.S. Open by Rolex, where he joked that he was only invited as a way to get him to lower the tariffs. It also came with the Swiss government promising to invest $200 billion into the U.S. by 2028.
Marcus Altenberg, managing partner at the Swiss law firm Goldblum & Partners, called the 15% rate a “serious but manageable cost factor.” Goldblum & Partners is based in Zurich and advises large Swiss conglomerates in the export business. Watch brands like Rolex and Patek Philippe have already raised prices by around 15% in response to the tariffs, and it’s unlikely they will lower them even with the tariffs coming down.
“A 15% rate will still mean higher U.S. retail prices and tighter margins, but in the short term, it should stabilize export volumes and allow brands to adjust price lists and allocations more gradually instead of pushing double-digit increases overnight,” Altenberg told Glossy. “The pre-owned and grey markets in the U.S., which were already gaining share, will remain structural winners because they are less directly exposed to border tariffs and can arbitrage global price gaps.”
But, Altenberg said, in the long term, the new framework is likely to accelerate existing trends in the market. Swiss watch exports were down 2.8% in 2023, volumes have been at a historic low, and other markets like Japan have increased their imports of Swiss watches. Now, with an additional 15% tariff to handle, Swiss brands may become more interested in emerging markets like Japan and Hong Kong. Watch imports to the U.S. already dropped by over 50% between September and October of this year.
Quaid Walker, founder of the secondhand watch marketplace Bezel, told Glossy that independent brands are likely going to shift some attention to markets outside the U.S., based on conversations he had at Watches & Wonders this year.
He also said the tariffs are causing headaches for collectors, some of whom already purchased watches with a built-in tariff price this summer. It’s made the pricing of watches in the secondary market more unsettled. Walker said pricing of secondary watches is more art than science. As such, unexpected volatility, such as abrupt changes in tariff policy, leads to longer periods of confusion over prices.
“When they first announced 39%, it took a while for the market to figure out where prices would sit,” Walker said. “Then it comes back down to 15%, but will it go down again to 10%? Or go away altogether? Nobody knows. It creates confusion in the secondary market. Dealers don’t know what to price things at, they don’t want to lower or raise prices prematurely, and consumers see different prices for the same watch. It makes things very unclear.”
