The US Tariff Ticking Clock: How The Import Duties Are Impacting the Watch Industry

The U.S. has recently slapped steep tariffs on imported watches and watch parts, upending a finely tuned global supply chain. For example, a proposed 31% levy on Swiss-made timepieces means a $10,000 Rolex could carry an extra $3,100-driving its pre‐tax price above $13,000. The impact is serious: the United States is by far Switzerland’s largest watch market (about 16.8–17% of exports). In early 2025 the U.S. announced 31% tariffs on Swiss goods (vs 20% on EU, 10% on UK), immediately rattling industry stocks and strategies. Major luxury groups like Richemont (Cartier, Piaget) and Swatch Group (Omega, Breguet) saw share prices drop on the, since analysts warned their profit margins are already “thin”. Suddenly, a large chunk of the world’s top watch brands faced much higher U.S. import costs. JPMorgan analysts already warned that entry to mid-level Swiss watches could be hit hardest.

Table 1: Announced Price Increases by Major Swiss Watch Brands in the US

Brand	Average Price Increase (%)	Effective Date
Rolex	3%	May 1, 2025
Omega	5%	May 1, 2025
Swatch Group AG (select brands)	8-10%	Varies

Supply Chain Pressure

Tariffs don’t just hit finished watches – they jolt the whole supply chain. Switzerland is home to many specialized component makers (movements, springs, cases, dials, crystals, etc.) that feed global brands. A Reuters interview with a Neuchâtel parts supplier summed up the anxiety: “It’ll be very difficult to get new projects if the market doesn’t recover,” said one executive. “One of our clients is American, and we’re waiting to see." In practice, U.S. buyers have already started hesitating. As one Geneva dealer put it, retailers in America were “freaked out” by the tariff news, worrying it could put the market into a “complete freeze, or free fall”. Indeed, the watches industry was abuzz at the time: the announcement broke during the big Watches & Wonders fair in Geneva, halting deals and dampening the mood (some meetings with American clients were even canceled) Even Japanese brands have felt the ripple effects. In parallel with Swiss tariffs, Washington also threatened high tariffs on all Japanese goods (originally 24%, later trimmed to 10% for 90 days) That would have covered exports from Seiko, Grand Seiko, Citizen, etc. Japanese manufacturers now face the prospect of U.S. consumers paying extra or buying less.

Pricing and Demand Shifts

The immediate effect of tariffs is to raise costs. Brands generally try to keep global prices in line, but in the U.S. market consumers are likely to see higher tags. Industry experts predict retail watch prices in the U.S. will jump by roughly 5–10% on average. In April 2025, Rolex itself confirmed a ~3% U.S. price increase (effective May 1) explicitly due to the new tariffs. Swatch Group announced hikes around 5–10% for its U.S. lines. Smaller direct-to-consumer brands are even more exposed: British maker Christopher Ward, which ships Swiss-made watches directly to U.S. buyers, has begun passing the tariff straight to customers in checkout emails. Its CEO has been quoted as saying “our base selling price hasn’t changed at all – it’s the additional taxes…which has been applied by the United States administration”.

In the short term some buyers rushed to complete watch purchases before prices rose, but after that “front-loading” of demand, there may be a slowdown or cooling-off period while shoppers digest higher prices. Luxury watches are considered a relatively price-inelastic segment-a modest increase (say 5–10%) might slow down new buyers or entry-level models, but many collectors remain willing to pay for status, heritage, and quality. Chrono24’s founder notes that once the market adjusts, demand tends to rebound as confidence returns. He also predicts that U.S. buyers initially discounting secondary-market watches from pre-tariff inventories would soon see those prices climb in turn, following the rise in new retail pricing.

Brand Impacts and Distribution

Virtually every major luxury watch brand with a U.S. presence feels the pinch. Rolex (the world’s top-selling Swiss brand) will sell more than a million watches in 2025, but its U.S. prices just rose ~3%. Omega followed with ~5%. Cartier, TAG Heuer, Tudor, Breitling, Grand Seiko and other big names are expected to adjust their pricing as well. Supply-chain disruptions can spill into distribution. Retailers may receive shipments later (waiting for clarity), and collectors outside the U.S. may adjust their buying plans too. Inside Switzerland, the watch boutiques are highly dependent on global tourism and export sales. If Americans curb watch imports, Swiss stores may see fewer customers from abroad and mounting inventory. Dealers worry that a 31% import duty would scare off many buyers. As one Swiss dealer warned, when U.S. customers balk at an added 31% tax, it could send “the market [into] complete freeze, or free fall.” Demand-wise, industry reports note that American collectors are willing to shop around. Some may turn to second-hand or pre-owned watches, or even consider non-traditional brands. Direct-to-consumer firms like Shinola (Detroit) or RGM (PA) might tout “Made in USA” assembly to sidestep import taxes. On the other hand, lower-dollar “fashion” watches (which often use Asian movements) aren’t targeted by these Swiss/EU tariffs, but broad trade tensions could eventually spread to components and raw materials too.

Country/Region	Tariff Rate (%)
Switzerland	10% (baseline), potentially 31%
European Union	20%
Japan	24%
UK	10%

Industry Response

The watch industry is trying to adapt. Companies and governments are lobbying to mitigate the damage. Swiss business groups have formally protested to U.S. trade authorities, and Switzerland is reportedly preparing to raise the issue at the WTO. Diplomats from Switzerland, the EU, Japan and other affected countries are racing to negotiate carve-outs or rollbacks. Some companies are exploring longer-term shifts. A few Swiss manufacturers are investigating partial production relocation (e.g. moving assembly of cases or straps to the U.S.) so they can label watches as “Made in America” to avoid import taxes. However, most luxury watchmaking is hard to export: “It’s totally unfeasible to move only parts of production…while relying mainly on imported Swiss components,” industry analysts note. To truly evade the tariffs, a brand would need a full U.S. facility and staff – a tall order given Switzerland’s craft tradition. Still, the tariffs may accelerate plans for broader diversification. For instance, several brands are already increasing assembly in Asia or the Americas for certain models.

Best case vs. worst case

So really, the main question becomes, "What could happen?". The answer is obviously unknown, but we like to try and offer up some provoking thoughts.

Best case scenario:

The tariffs prove temporary. In fact, in early April 2025 the White House announced a 90-day pause on the highest rates, reverting to a 10% “reciprocal” tariff. If negotiations succeed, U.S. and Swiss (and other) officials could strike a deal to trim or eliminate the new duties. Under this outcome, the watch industry would likely weather a brief shock. Retail prices might only see small upticks and savvy consumers would adjust. The pre-owned market would absorb any spikes. Over time, pent-up demand could even boost sales once fears of tariffs subside. Chrono24’s analysis suggests that after an initial buying frenzy and pause, demand will eventually rebound as buyers refocus on long-term value. In the long run, a mild scenario could also spur modest investment in U.S. watchmaking or assembly (helping local brands) without crippling the established Swiss and Japanese industries.

Worst case scenario: Tariffs remain high or widen into a full-blown trade war. If the 31% U.S. levy is reinstated after the pause or extended to other countries (for example, if tariffs on Japanese goods snap back or if new duties hit materials like steel, electronics or watch components), the luxury watch sector could suffer greatly. U.S. demand would likely contract; dealers and brands might cut back U.S. operations. Global growth in the luxury segment could stall or even decline. Some Swiss brands might shift more sales to Asia or the Middle East, intensifying competition there. Smaller brands could exit the U.S. market entirely. Suppliers of watch parts might downsize, and talent could flow away from watchmaking. Economically, a prolonged tariff environment risks dragging the broader economy into a downturn (international firms are already warning of a broader global slowdown from protectionism.

In reality, industry observers expect a mix of these outcomes. So far, even with high-stakes headlines, the tariff dust has only partly settled. But one thing is clear: for luxury watchmakers and aficionados alike, high tariffs, even if temporary, represent a major new variable in pricing, planning and worldwide demand.

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