Who's Eating the Tariffs

Has buying a Swiss watch in the United States become more expensive? That question has been on the minds of collectors ever since the Trump administration announced a hefty 39% tariff on Swiss imports, effective 7th August 2025.

How dire is the situation? Well, the leaders of Swiss watch businesses like Rolex and Richemont just met with President Trump in the Oval Office to “pledge support for ongoing trade talks between the two countries.”

As discussed in my earlier essay, the move stemmed from what Washington called an “unfair” trade deficit with Switzerland—compounded, curiously, by frustration over high U.S. drug prices. The tariff, however, excludes both gold and pharmaceuticals, leaving Swiss watchmakers squarely in the crosshairs.

The timing couldn’t be worse. The U.S. has overtaken China as the world’s largest market for Swiss luxury watches—in 2024, the U.S. imported CHF 4.4 billion worth of Swiss watches, accounting for roughly 17% of total Swiss watch exports.

And because the “Swiss Made” label requires most of a watch’s value to be produced domestically, manufacturers can’t simply relocate to dodge the tariffs.

CEOs like Swatch Group’s Nick Hayek Jr. admitted that his company front-loaded shipments to the U.S. ahead of the deadline, hoping to build a buffer of inventory before the new duties kicked in. But as President Trump told brands and retailers to “eat the tariffs,” the question remains: who’s actually absorbing the cost, and who’s passing it on?

The Dilemma Swiss Brands Faced

If you were a Swiss watch executive, what would you do?

Absorbing the tariffs keeps prices steady and protects U.S. market share, but at the cost of profit margins and long-term sustainability. Passing them on preserves profitability but risks alienating mid-tier buyers, fuelling grey-market reselling, and undermining accessibility for younger collectors.

In practice, most brands landed somewhere in between. Haute horlogerie names like Patek Philippe nudged prices upward with little resistance, while most maisons besides the top tier chose to absorb part of the hit to stay competitive.

As I mentioned during the recent Patek Philippe price hike, a 10–20% price difference hardly matters to ultra-high-end collectors, but for aspirational buyers, it could make the difference between pulling the trigger on that first watch, staying loyal or exiting the category.

U.S. Versus European Watch Prices Today

Surveying price lists across the three major watch groups—Swatch, Richemont, and LVMH—I noticed something surprising: most brands haven’t raised U.S. prices beyond their Swiss Franc or Euro equivalents.

In fact, a few even priced U.S. models slightly lower to remain appealing.

As of this writing, the Euro trades at roughly USD 1.15 and the Franc around USD 1.23, yet the disparities remain narrow:

Zenith Defy Skyline Tourbillon (LVMH): CHF 89,900 | EUR 97,400 | USD 93,300

Panerai Luminor GMT Ceramica (Richemont): EUR 15,300 | USD 15,800

Glashütte Original PanoMaticLunar Anniversary Edition (Swatch Group): EUR 39,000 | USD 39,500

The pattern suggests that while brands may be absorbing part of the tariff, they’re working hard to keep U.S. prices within global norms.

Naturally, the scale, vertical integration and diversified global exposure of watch groups helps them absorb costs better, while independent brands may find tariffs more painful since they lack pricing power or volume buffers.

Some Brands Responded With Transparency and Humour

Reactions have ranged from candid to cheeky.

Independent watchmaker Christopher Ward took the transparent route: enter a U.S. shipping address on its website, and a “customs duty” line item automatically appears.

Swatch, true to form, took a playful jab at the situation, releasing a tariff-themed watch with the numerals “3” and “9” swapped, referencing the 39% levy. Similarly, Raymond Weil launched a limited run of 39 watches etched with whimsical markings like “14%,” “39%,” “???,” and “time will tell”—a wry nod to the confusion surrounding the fluctuating rules.

So, Who’s Really Eating The Tariffs?

In short: everyone, to some degree.

To preserve goodwill and market share, most Swiss brands have absorbed part of the cost, but they’ve also spread the burden globally through gradual, uniform price adjustments, rather than dumping it entirely on U.S. buyers.

This ripple effect has contributed to the tight supply and rising prices noted across the secondary market.

Nonetheless, the aforementioned market forces are making the secondary market more and more enticing. It’s soared in size and legitimacy, and the sector is now worth over US$25 billion globally.

“We’re seeing high demand and limited availability—a perfect storm that’s pushing up prices,” says James Ip, co-founder of SRK Haute Horlogerie.

“As an example, since August 2025, ‘Panda’ Daytonas are up more than 10%, with far fewer pieces in circulation on the secondary market. The Trump tariffs are starting to trickle through globally, and with gold prices soaring, collectors are buying now before brands raise prices again in early 2026.”

For opportunistic buyers, that means your grail watch might surface on the secondary market—though competition there is heating up fast.

Meanwhile, the tariff on German and Japanese goods is only 15%. This bodes well for these emerging watchmaking regions, which continue to climb in prestige and popularity.

Like the Quartz Crisis, the tariff crisis is forcing Swiss watchmakers to rethink production, pricing, and identity, while revealing which brands are nimble versus complacent. Expect more fluctuations in legislation to come.