Trump’s Tariffs Shake Swiss Watch Industry: Luxury Brands Brace for Fallout
PetitePaulina – The Trump administration’s decision to impose a 39% tariff on Swiss imports has sent shockwaves through Switzerland’s luxury watch sector. Industry insiders, including consultant Oliver R. Müller, voiced alarm at how this move could strain an industry already navigating weakened demand from Asian markets. Müller expressed that U.S. demand had become a vital cushion, one now at risk of collapsing under rising costs.
Retail Prices Set to Soar in the U.S.
If passed on to distributors and ultimately consumers, the tariffs are expected to trigger a retail price hike between 12% and 14%. That translates to a potential $1,000 increase on models like the Rolex Submariner, currently priced at $9,500. For enthusiasts and casual buyers alike, this could alter purchasing behaviors and slow the momentum of Swiss watch sales in the U.S.
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Trump and Family’s Affinity for Swiss Timepieces
What confounds observers even more is Trump’s known appreciation for Swiss luxury watches. From Rolex to Patek Philippe, he and his administration have often been seen wearing these status symbols. This paradox — imposing heavy tariffs on a product category personally favored — adds layers of irony and frustration for Swiss brands and U.S. collectors alike.
Retailers Scramble to Mitigate Fallout
Retail chains like Watches of Switzerland are already coordinating with luxury brands to manage the potential disruption. The U.S. luxury watch market has grown significantly, fueled by social media exposure and influencer culture. As prices rise, brands may face challenges in retaining newer, price-sensitive customers, particularly among younger demographics.
Political Motivations Not Watch-Centric
Interestingly, administration officials have downplayed the role of watches in the tariff policy. Instead, they emphasized pharmaceuticals as the main driver of trade imbalances. With the U.S. lacking its own high-end watch manufacturing base, this decision appears more broadly targeted, leaving the Swiss industry to bear unintended consequences.
Trouble Ahead for Swiss Exporters
Even before the tariff announcement, the Swiss watch industry was showing signs of strain. Exports fell 5.6% in June, driven by slumps in major markets like the U.S., Japan, and Hong Kong. The sudden tariff adds further instability, casting doubt over future trade relations and threatening a pillar of Swiss luxury manufacturing in a time of global economic uncertainty.
