Swiss Watch Tariffs: Impact On Us Market & Luxury Sales

The US is the largest foreign market for Swiss watches, and represent 16.8 percent of exports worth concerning CHF 4.4 billion ($ 5.5 billion), according to the Federation of the Swiss Watch Market (Fédération de l’industrie horlogère suisse, FHS). It’s a significant impact, claims Oliver Müller, owner of watch market consultancy LuxeConsult, specifically given the US helped to compensate for the Chinese market downturn post-Covid. “We will certainly need to be much more active in other markets to advertise and reconnect with more youthful demographics to compensate for the to-be-expected slowdown of the US market,” Müller says.

US Market Impact and Expert Opinions

Experts prepare for a temporary uptick sought after for previously owned watches, however, Trinh warns, this can just last so long. “Since the tariff is tied to provenance, any kind of Swiss-made watch that crosses US custom-mades– whether it left the factory the other day or in 1994, whether from Geneva or Madrid– incurs the full duty,” she flags. This means that, on 7 August, Swiss-made watches currently in the United States ended up being a “transient possession course” of their very own, Trinh says, with proprietors having abrupt liquidity. “Nevertheless, when that storage tank has circulated a couple of times, secondary-market prices will approach the duty-inflated expense of fresh imports and the first thrill will certainly ease.”

Tariff Effects on Previously Owned Watches

Even before they knew how high the tariffs would be, execs were worried. In July, Bernard Arnault toldTheWall Street Journal: “I’m pushing as much as I can for us to reach an arrangement with the Americans, so that we do not obtain caught up in a trade war, which would certainly be incredibly harmful for European organizations.” That very same month, Richemont chair Johann Rupert ensured financiers that the business wouldn’t start high cost rises.

Industry Concerns and Preparations

Every one of this could accidentally boost need, many thanks to a deficiency attitude that might well set in. Trang Trinh, that runs Girls O’Clock, a digital magazine with a concentrate on high-end timepieces, additionally does not believe a rate increase will certainly scare off most first-time customers. “In the short-term, it may lower demand as customers alter their cost assumptions, yet any individual considering a steel Bvlgari Serpenti, Cartier Container, or Rolex Datejust is already in the luxury space, where choices rest on social signalling and need remains fairly price-inelastic,” Trinh states. “I’m in fact interested to see if the steeper price might also increase the watch’s cultural prestige.”

Consumer Demand and Market Prestige

Nobody was expecting 39 percent. On 5 August, Swiss government head of state Karin Keller-Sutter travelled to Washington in a bid to work out the tariff down. She has apparently considering that left Washington without a reduced tariff arrangement.

Deluxe had big aspirations for the US watch market in 2025. Yet after a roller rollercoaster of on-again, off-again tolls, these high hopes have actually proved a lot more much fetched than tough high-end execs had prepared for. Currently, the simply carried out 39 per cent toll on Swiss-made products– one of the highest possible rates on the planet– presents a major barrier to United States development.

Solca expects increases in the high teens to reduced 20s to balance out the 39 per cent toll. Solca also expects that brand names would readjust to reduced volumes of watches going into the US.

Navigating the 39% Tariff: Strategies and Outlook

Still, sector numbers are holding out hope that this extra cost will drop lower than the current rate. “We are all maintaining our fingers crossed in Switzerland that a final bargain could be located to prevent the severe 39 percent announced by President Trump,” Solca claims.

Analysts are vague as to why the toll is so much greater than expected. “No person would certainly have predicted that Mr Trump would blast a country that has always greatly bought the United States,” Müller states. “Although we are a little nation, we are the sixth most significant capitalist in the United States and several Swiss business are major job creators in the US.”

Luxury had large aspirations for the United States watch market in 2025. The US is the biggest foreign market for Swiss watches, and accounts for 16.8 per cent of exports worth regarding CHF 4.4 billion ($ 5.5 billion), according to the Federation of the Swiss Watch Sector (Fédération de l’industrie horlogère suisse, FHS). It’s a significant blow, states Oliver Müller, founder of watch sector consultancy LuxeConsult, specifically provided the United States helped to make up for the Chinese market decline post-Covid. “Even though we are a little country, we are the sixth biggest capitalist in the US and many Swiss firms are significant task designers in the US.”

The watch market is already in a downturn: Swiss watch exports were down 9.7 percent in Might, and it was already supporting for high levies. On day two of Geneva’s Wonders and watches trade convention back in April, Head of state Donald Trump introduced a 31 per cent duty on Swiss imports. At the time, experts claimed that this was “a catastrophe”, and even worse than they had actually feared. That the final tariff, which entered result on 7 August, is also greater, is yet an additional strike.

Diverging Buyer Behavior

Vendors and purchasers are falling into two camps, she claims. For consumers wanting to purchase ‘daily luxury’ watches, they’re looking for pieces currently inside the US, includes Trinh. These costs are already rising: “Lots of domestic suppliers are marking up that duty-free swimming pool as it expands scarcer and pricier.” The greater deluxe end is a different tale. “At the high-ticket end– where purchases were constantly bespoke, with travel, VAT refunds and hand-delivery baked in– enthusiasts just re-run the numbers, and if the new 39 percent responsibility makes a six-figure watch a lot more pricey here, they schedule the flight and bring it home themselves,” Trinh states. “Demand is still undamaged now, the only inquiry is how the added cost will be divided between vendor and purchaser.”

“Because the toll is linked to provenance, any kind of Swiss-made watch that goes across US custom-mades– whether it left the manufacturing facility yesterday or in 1994, whether from Geneva or Madrid– sustains the complete obligation,” she flags.

Brand names have been preparing, states Bernstein deluxe items expert Luca Solca. “Swiss watch business had been shipping stock in the expectation that tariffs would certainly go up– even if the price was [expected] to be someplace around 20 percent or so,” he claims.