Switzerland is bracing for a big tariff hike on its exports, and its watch industry could take the brunt if President Trump hits Alpine nations with an enhanced 39% tariff for its exports, slated to start on Aug. 7.
The Swiss watch industry employs thousands of artisans at various watchhouses that pump out millions of wristwatches and clocks each year. The industry also employs thousands in corporate and retail roles too.
In 2024, Swiss watch exports hit $29.5 billion, second only to manufactured items like pharmaceuticals and chemical products, with the US being Switzerland’s main trade partner.
A tariff at these levels could crush demand for new Swiss watches.
“A 39% markup could make even a stainless-steel Submariner at retail jump from $10,000 to nearly $14,000,” secondhand dealer Bob’s Watches CEO Paul Altieri said to Yahoo Finance.
Read more: What Trump’s tariffs mean for the economy and your wallet
Altieri noted that Bob’s Watches’ demand for pre-owned models is on the rise, with buyers hoping to avoid the tariff price surge.
Indeed, watch prices have already been rising in the US when Swiss exports were hit hit a 10% tariff earlier this year.
Morgan Stanley and its data partner WatchCharts found that prices for luxury watchmakers like Patek Philippe (up 6.9%), Audemars Piguet (up 6.7%), and Richemont’s (CFR.SW) Vacheron Constantin (up 6.5%) have risen the most in its second quarter industry report.
And these tariff-fueled price hikes won’t just be situated in the US but will likely affect global customers too, argued watch trading site Subdial, which runs an online watch marketplace and releases its own watch index with Bloomberg.
“If they increase prices in the US only, we may see a knock on effect in other markets. It seems more likely that brands will increase prices across all geographies (so as to maintain pricing parity, an important principle within luxury), and just accept lower margins on US stock on account of tariffs,” a spokesperson for Subdial said.
Price hikes will push more of these buyers to the secondhand market, where the selection is vastly wider and deals can be found, the Subdial spokesperson added.
The big watch houses and retailers aren’t saying much at the moment about where prices are headed.
Swiss-based Swatch Group (UHR.SW) is the largest watch producer in the world and counts brands like Omega, Blancpain, Breguet, and, of course, Swatch, in its portfolio. A spokesperson for the group said the company would not comment at this time.
Geneva-based Rolex, which is estimated to produce over a million luxury watches a year, is in the tariff crosshairs. A Rolex spokesperson did not respond to Yahoo Finance when sought for comment.
Watches of Switzerland (WOSG.L) is one of Rolex’s top retail partners and operates certain “monobrand” Rolex-only boutiques.
“We note the announcement of the proposed new US tariff rate on imports from Switzerland due to come into effect on 7th August and will continue to work closely with our brand partners to mitigate any potential impact,” the company said in a statement to Yahoo Finance.
Mitigating the impact in this case likely means passing on tariff costs to customers and/or absorbing a small percentage. And this is because the effect of full passage to customer would be huge.
For Rolex and Watches of Switzerland, the tariff effects may not be as severe since they operate their own certified pre-owned (CPO) watch programs. Last year Rolex bought Bucherer, the jewelry and luxury watch retailer that operates the Tourneau chain in the US.
New watch buyers could shift to these CPO programs and still keep revenue flowing. But as Bob’s Watches points out, used prices are climbing in sympathy as demand rises.
Interestingly, Trump’s tariffs on the Swiss could actually hurt his own business interests.
Last year, Trump licensed his name for a range of Trump-branded watches, with models dubbed “Fight Fight Fight” and “Mugshot suit,” as well as a $100,000 Swiss-made tourbillon movement watch in solid 18K gold.
Pras Subramanian is the lead autos and wealth reporter for Yahoo Finance. You can follow him on X and on Instagram.
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