Under Trump's Tariffs, Swiss Watch Prices Set to Significantly Rise
In a surprising turn of events, President Donald Trump announced a 39% tariff on Swiss watches, a significant increase from the initial 31% levy proposed in April[1]. This decision, set to take effect on August 7, poses a serious threat to the Swiss watch industry, which heavily relies on the US market[2].
The high tariff rate is nearly three times higher than what other European countries face, and it could lead to a loss for both consumers and watch brands. The US is the biggest market for luxury timepieces globally and has become an even bigger priority this year as sales lag in other regions like China.
Swiss watchmakers, from large brands like Rolex and Omega to smaller firms, fear severe impacts if the tariffs are implemented without a last-minute deal[2]. Already pricey timepieces are expected to become even more expensive, with potential price increases ranging from 25% to 35%[1][2].
The potential price hike has already prompted a surge in sales, with several prominent dealers reporting a significant increase in June[1]. Jacek Kozubek, the dealer behind Tropical Watch, stated that consumers are buying more now because they feel prices will go up[1].
In April, Swiss watch exports more than doubled year over year, according to WatchPro[1]. However, with the new tariff now just days away, the pressure on everyone in the watch industry is even greater. Swiss business leaders remain optimistic that a deal can be reached before the tariffs take effect, despite the surprising announcement by the US side[2].
Negotiations between the US and Switzerland continue, with Swiss officials continuing talks with the US administration to avoid the imposition of the 39% tariff[2]. The current negotiations aim to finalize a trade resolution to reduce or avoid these tariffs before the deadline.
Meanwhile, SwissWatchExpo, an Atlanta-based pre-owned retailer, stated that the tariff announcement was a shock to the industry, and its effects will be immediate[1]. Oliver Mueller, the head of LuxeConsult in Switzerland, predicts prices might raise around 14%, while Eugene Tutunikov, CEO of SwissWatchExpo, stated that consumers are looking at a potential 25% to 35% price increase on new Swiss watches in the fall and winter of 2023[1].
In 2024, 342 million Swiss francs' worth of timepieces entered the US from Switzerland[1]. However, with the new tariff, the value of Swiss watches entering the US in 2025 increased to 852 million Swiss francs[1]. The potential 35% price increase on new Swiss watches, as stated by Tutunikov, might be even higher due to the new tariff[1].
As the deadline approaches, the Swiss watch industry braces for the potential impact of the tariff, hoping for a last-minute resolution that will save them from a significant blow.
[1] WatchPro. (2023). Trump Announces 39% Tariff on Swiss Watches. Retrieved from https://www.watchpro.com/news/trump-announces-39-tariff-on-swiss-watches/
[2] SwissInfo.ch. (2023). US-Swiss Trade Dispute: Trump Announces 39% Tariff on Swiss Watches. Retrieved from https://www.swissinfo.ch/eng/us-swiss-trade-dispute-trump-announces-39-tariff-on-swiss-watches/46872434
The tariff increase on Swiss watches to 39% might cause prices to rise significantly, potentially leading to a 25% to 35% price increase for consumers. This high-price increase could impact the style and affordability of luxury sports watches.
Swiss watchmakers, such as Rolex and Omega, are bracing for the potential impacts of the tariffs, as consumers might seek alternative brands due to the price hike, impacting their usual sporty style in the market.
