President Donald Trump’s recent imposition of a 39% tariff on Swiss goods, including watches, has sent shockwaves through the Swiss watch industry. The United States is the largest market for Swiss watches, and this move has dramatically affected brands, retailers, and collectors. When the 31% tariff was first announced in early April, the industry reacted with alarm.
“We were like, 31 percent—this completely changes the business and how we’re supposed to operate,” says the founder of EsperLuxe, a high-end watch retailer in Boston. “If the market survives that kind of pricing.”
During the 90-day pause that followed, with a temporary 10% tariff in place, the industry scrambled to adjust. Some brands increased prices but offered retailers some margin, while others absorbed the costs through multiple layers of distribution.
However, not all were able to mitigate the impact, forcing some to pass the additional costs onto consumers. The situation intensified when it was announced that from August 7, the tariff would increase to 39%, making it one of the highest U.S. levies in the world. This development, coupled with other economic challenges, has created a perfect storm for the industry.
“Prices have gone up, margins have decreased.
Swiss watch industry braces for turbulence
I don’t think it’s good for anybody,” notes Steven Holtzman, vice chairman at CD Peacock in Chicago.
He speculates that brands might circumvent the American market altogether, reallocating their goods to other countries if the U.S. market becomes untenable. Dealers in the secondary market are also being affected. “Rolex has always been a symbol of style and quality, and over the last five years it’s been a symbol of scarcity,” says Paul Altieri, founder and CEO of the pre-owned dealer Bob’s Watches.
“Supply is going to be more constrained.”
The big question looming over the industry is the pain threshold on prices and how a sustained tariff could affect demand, especially if other economic indicators decline. “There’s only so much you can bury. Prices inevitably have to go up,” says the EsperLuxe founder.
Secondary market dealers have also expressed concerns. Eugene Tutunikov, CEO of SwissWatchExpo, a secondhand dealer in Atlanta, says, “So far, tariffs have been a blessing and for the next one to three months, they’ll be a net positive. But if they stay in place for six months, it will be difficult for us to acquire inventory and consumers will have less demand at higher prices.”
Ultimately, the Swiss watch industry is bracing for a challenging period ahead.
As brands, retailers, and consumers navigate the complexities of these tariffs, the market will need to adapt to survive these significant changes.