Trump Tariffs Threaten Swiss Watch Industry: Impact on US Sales and Global Markets

Looming Tariffs on Swiss Watches

• 🇨🇭 The Swiss watch industry is in a state of panic due to a potential 39% tariff on imports to the US, scheduled to take effect Thursday.
• 🎯 The US is the largest market for Swiss watches, with over $5 billion in sales last year, making this tariff potentially devastating.
• 📉 Brands are increasingly reliant on the US market as sales in China have declined.

Impact on Watch Brands and Prices

• 💥 Retailer Watches of Switzerland saw shares fall, while brands like Cartier and IWC experienced volatility.
• 💎 Top-tier brands like Rolex, Audemars Piguet, and Patek Philippe would be less affected due to existing sell-out status and long waiting lists.
• 📈 The tariff would increase the import value by 12-14%, raising the retail price of a Rolex Submariner from approximately $9,500 to $10,600.

The Pre-Owned Watch Market Opportunity

• 🌟 The pre-owned watch market is poised to benefit, as demand for used watches has been rising faster than new ones.
• 📊 Sales in the secondary market increased by 30% this year, now representing a third of all watch sales.
• 💡 This could be a silver lining, potentially seeing an increase after months of decline due to excess supply.

Swiss Government and Trade Relations

• 🏛️ The Swiss government is also in a state of concern, facing pressure from the watch industry to secure a deal.
• ⚖️ Switzerland runs a large trade surplus with the US, primarily due to gold refining and pharmaceuticals, not watches.
• 🤝 Lobbying efforts are underway to urge the Swiss government to act swiftly to reach an agreement, with potential announcements expected this week.