Impact of Trump’s 2025 Tariff on Luxury Watch Prices

Trump’s 2025 Tariffs: Proposed Rates and Targeted Countries

Donald Trump’s trade policy for 2025 centers on sweeping new import tariffs aimed at protecting U.S. manufacturing, impacting luxury watch prices in both authorized dealers and secondary markets. In early April 2025, Trump announced a 10% baseline tariff on all imports, plus higher “reciprocal” tariffs on dozens of countries that run trade surpluses with the U.S.​ These targeted tariffs vary by country, with some of America’s largest trading partners facing double-digit import taxes:

• Switzerland – 31% tariff on imports​ (far above the 10% base rate). This is especially significant since Switzerland is a major exporter of luxury watches.

• European Union (e.g. Germany) – 20% tariff on imports​. Germany, as part of the EU, falls under this 20% rate. (The base 10% applies broadly, with the additional 10% bringing it to 20%.)

• Japan – 24% tariff on imports​, reflecting Japan’s trade surplus with the U.S. in goods like automobiles and electronics (and also affecting Japanese watch exports).

• (For context, China faces an even steeper 34% “reciprocal” tariff in this plan​, on top of separate tariffs that have raised effective rates on Chinese goods to over 100%​. However, China is not a major source of Swiss-quality luxury watches, so the focus here remains on Switzerland, the EU, and Japan.)

Trump cast these tariffs as a move to correct trade imbalances, even dubbing April 2, 2025 “Liberation Day” when signing the executive order​. Under the policy, 57 countries were slated for higher-than-10% tariffs ranging from 11% up to 50%​. Switzerland’s 31% rate, for example, was derived from the U.S.–Swiss trade deficit, rather than any specific Swiss tariff on U.S. goods​. Notably, Switzerland imposes no comparable duties on American products – the tariff is one-way, based purely on Trump’s “reciprocal” formula which many economists argue misinterprets trade deficits​.

It’s important to note that most of these country-specific surcharges were temporarily paused for 90 days shortly after the announcement (with the exception of China)​. This pause means that as of April 2025, the 10% base tariff is in effect for all imports, but the additional tariffs on Switzerland (31%), EU (20%), Japan (24%), and others are delayed (potentially taking effect after the 90-day window if no policy change). Even so, businesses are preparing as if the full tariffs will materialize, given the uncertainty of whether the pause will hold. Many company executives “breathed a sigh of relief” at the 90-day delay, yet remain wary that the higher rates could soon kick in​. In the meantime, any country that retaliated with its own tariffs (like China) is not spared; for example, China’s 125% retaliatory tariff was met with Trump raising U.S. tariffs on Chinese goods to 145%​. Overall, the tariff policy marks a dramatic shift – raising the average U.S. tariff from about 2.5% to an estimated 27%, the highest level in over a century​.

Luxury Watch Industry Exposure: Switzerland, Germany, and Japan

The luxury watch sector is particularly exposed to these tariffs because the vast majority of high-end watches imported to the U.S. come from Switzerland, with additional contributions from Germany and Japan. Switzerland is by far the dominant player in luxury timepieces: the U.S. imported about CHF 4.4 billion (Swiss francs) worth of Swiss watches in 2024, making the U.S. the largest single market for Swiss watch exports​. Iconic Swiss brands like Rolex, Patek Philippe, Audemars Piguet, and Omega – specifically mentioned due to their popularity – all manufacture in Switzerland and thus fall under the proposed 31% U.S. import tariff. This threatens to significantly raise their prices in the American market.

Germany represents a smaller slice of the luxury watch pie, but it is home to renowned high-end makers such as A. Lange & Söhne and Glashütte Original. German watch exports would be subject to the EU’s 20% tariff rate​. While German luxury watches are niche compared to Swiss brands, they cater to connoisseurs – and a 20% import duty will likewise make these already-expensive timepieces even pricier in the U.S.

Japan, meanwhile, produces luxury watches under brands like Grand Seiko and Credor (as well as high-quality midrange watches by Seiko and Citizen). The tariff on Japanese imports is set at 24%​. Grand Seiko, which has been gaining popularity in the U.S. luxury market for its craftsmanship, would see its watches hit with a near-quarter increase in landed cost. Japanese watchmakers also sometimes rely on imported components (and note that any components sourced from China would face over 100% tariffs, compounding the cost issues​).

In short, Switzerland’s watch industry has the most at stake, given its scale and the 31% rate, but luxury watch exports from Germany and Japan are also squarely in the crosshairs of Trump’s tariff scheme. All three countries have no real “domestic U.S.” competitors in luxury watchmaking – the U.S. does not have a large luxury watch industry of its own – which makes the tariffs primarily a revenue-generating tool rather than a protective measure for an American industry. As one industry expert noted, Switzerland is in a “strong negotiating position” because “there is no equivalent U.S. luxury watch industry to protect”. In other words, these tariffs penalize foreign watchmakers (and U.S. consumers) without directly shielding any domestic producers – a fact that Swiss officials and executives are keen to point out in hopes of negotiating relief.

Impact on Retail Pricing in the U.S.

If these tariffs take effect in full, retail prices for luxury watches in the U.S. are expected to rise substantially. The basic arithmetic is daunting: a 10%–31% import tax could translate to roughly that much of an increase in sticker price, assuming brands and retailers pass the cost onto consumers. Luxury companies have little incentive to absorb such a tax themselves given the already thin margins in watch retail and the precedent set by others in the industry. In fact, many luxury brands are already indicating they will pass the tariffs directly to buyers. For example, French luxury house Hermès stated it is hiking U.S. prices to offset Trump’s 10% tariff on EU imports​euronews.com. Other European luxury firms like Chanel and Prada are similarly expected to leverage their pricing power to maintain profit margins, even if it risks dampening demand​. This mindset is echoed in the watch sector.

In the Swiss watch industry, smaller direct-to-consumer brands have moved first. Christopher Ward, a UK-based brand whose watches are manufactured in Switzerland, immediately informed U.S. customers that they would have to pay the full 31% import duty on any new orders shipped to the States​. As Christopher Ward’s CEO Mike France explained, the company’s base prices haven’t changed – but the U.S. government-imposed tax is being added on top, and the brand “can’t afford to absorb it”​. For a customer, that means a watch that costs $1,000 on the Christopher Ward website now incurs an additional $310 tariff at checkout if imported to the U.S. This immediate response highlights how quickly retail pricing can adjust upward when tariffs hit, especially for companies that ship directly to U.S. consumers.

The biggest Swiss watchmakers (Rolex, Patek Philippe, Audemars Piguet, Omega, and others) have so far not announced official U.S. price increases in response to the tariffs – but that is largely because many had enough inventory already in the country or were waiting to see if the 90-day tariff pause might stick. However, analysts warn these giants will have few options if the tariffs persist. JPMorgan analysts observed that the “most pressure [will be] on the Swiss watchmakers” given the high tariff and their dependence on U.S. sales​. In practice, once existing stock is sold and new imports incur the tariff, brands like Rolex and Patek will either have to raise their U.S. retail prices or offer smaller margins to their distributors/retailers (who may then raise prices themselves). It is widely expected that official price hikes will follow. In fact, Rolex already raised prices once in January 2025 (by up to ~8% on some gold models) due to rising gold costs, and industry observers predict another increase may come mid-year to address the tariffs​.

How much could prices jump? If the full tariff is passed through, it could be on the order of the tariff percentage itself. Paul Altieri, CEO of Bob’s Watches (a major pre-owned Rolex dealer), illustrated this with an example: a brand-new Rolex priced at $10,000 could see an added $3,100 in tariff costs, making it $13,100, and after typical sales tax (around 8%) the out-the-door price tops $14,000​. This represents roughly a 31% hike in pre-tax price for the consumer purely due to the import duty. Below is a comparison of current retail prices versus projected post-tariff prices for several popular watch models (from Business Insider):

Table: Approximate current retail prices vs. projected prices if full tariffs are applied. Swiss models reflect the 31% Switzerland tariff; the German model reflects the EU 20% tariff; the Japanese model reflects the 24% tariff on Japan. Actual price changes will depend on how brands implement the tariffs (full pass-through vs. partial absorption).

As the table suggests, U.S. luxury watch buyers could be facing price tags thousands of dollars higher than before. A steel Rolex Submariner that used to list around $10k might jump to around $13k+. A high-end German watch costing $40k could now approach $50k. Such increases are unprecedented in the modern watch market outside of currency swings. These tariffs would effectively make the United States one of the most expensive places on earth to buy a new luxury watch.

There are some nuances, however. Import tariffs are applied to the cost of the goods at import (wholesale cost), not the final retail price. Because luxury watches are typically marked up from wholesale (often retail is double the wholesale price or more), a tariff of, say, 30% on the wholesale value might equate to a somewhat smaller percentage increase on the final MSRP. One analysis noted that a 10% tariff on the import cost might equal roughly a 5–7% increase in MSRP, given typical margins​. By that logic, a 31% tariff on Swiss watches could translate to perhaps a ~15% bump in MSRP if brands chose to distribute the cost partly through their markup structure. However, in practice many brands will not want to compress their margins or those of their authorized dealers, so they may still raise official list prices nearly in line with the full tariff percentage. In short, consumers should be prepared for double-digit percentage price increases on luxury timepieces.

Consumer Demand and Market Repercussions

Will consumers still buy after such price hikes? Analysts and industry executives expect some softening of demand in the U.S. market if prices surge. Mike France of Christopher Ward anticipates “some dip in demand” as the market adjusts to the new taxes and higher prices. When a $10,000 watch suddenly costs $13,000+, even affluent buyers may reconsider or delay purchases. The luxury watch is a discretionary purchase, and price sensitivity does exist – especially if the broader economic mood darkens.

It’s not just hypothetical: early signs show U.S. luxury shoppers pulling back amid the tariff uncertainty and other economic headwinds. Reuters reported that fears around Trump’s tariffs were “dashing hopes in the $400-billion-a-year luxury industry” that wealthy Americans would help pull it out of a recent slump. Originally, global luxury sales were forecast to grow about 5% in 2025, but now a slight decline (−2%) is predicted, partly due to the tariff impact​. High-end watches, jewelry, fashion and cars all fall in this basket. If American demand softens, it hurts European luxury firms who had been counting on U.S. sales to offset weaker growth in China​.

The effect on demand may not be uniform across all luxury segments. Ultra-wealthy collectors who covet pieces from Patek Philippe or Audemars Piguet might absorb price increases and continue buying (especially for limited editions or hard-to-get models) – their purchasing decisions are less price-sensitive, and these items confer status that isn’t easily substituted. However, the more casual luxury consumers and aspirational buyers could scale back. Someone who was considering a Rolex Datejust as a celebration purchase might postpone it, or opt for a lower-priced brand, if the Rolex’s price jumps dramatically. Alternatives and substitutes also play a role: for instance, if Swiss watch prices soar, some buyers might consider high-end smartwatches or simply stick with their current collection rather than upgrade.

Economic context matters as well. Tariffs of this magnitude contribute to inflation on imported goods, and the uncertainty around trade wars can roil stock markets. Indeed, the tariff announcement caused global stocks to tumble and raised recession fears. If investors see their portfolios shrink, luxury spending could be one of the first areas to cut back. As one commentator put it, luxury shoppers may “tighten their purse strings against a darkening economic backdrop”​. Luxury brands themselves acknowledge this risk: understated, classic designs tend to sell better in downturns (when conspicuous consumption feels out of place), whereas blingy, ostentatious items become harder to sell​. This trend could influence what watches people buy – possibly favoring timeless models over flashy ones during the tariff-induced slump.

There is also the phenomenon of preemptive buying and geographical arbitrage. In the short term, savvy consumers rushed to purchase before the tariffs were originally set to kick in on April 9. U.S. retailers saw a surge in sales as buyers tried to beat the tariff deadline. This “pull-ahead” demand provided a temporary boost in late March/early April. However, that means those buyers have now satisfied their needs, potentially leading to a lull afterward. Looking forward, if the tariffs persist, some American buyers might attempt to buy watches abroad (for example, while traveling in Europe or Asia) to take advantage of relatively lower prices there – effectively avoiding the U.S. import tax. (Europe’s prices include VAT, but U.S. visitors can often get VAT refunds, and if they do not declare the watch upon re-entering the U.S., they might evade the tariff – albeit illegally. Even declaring it, one might prefer paying a lower foreign price plus duty than the higher U.S. retail.) We may also see more parallel or grey-market importing, where unofficial dealers route watches through countries with lower duties. However, given the across-the-board nature of Trump’s tariffs (10% minimum on all imports, and high rates on most major economies), finding a duty-free source is difficult. These workarounds are limited and carry risks; thus, the mainstream effect will be reduced consumer demand or shifting demand to other luxury goods not hit by tariffs.

Notably, because there is no domestic substitute (an American-made luxury watch of comparable prestige), the tariffs do not drive consumers to a local product – they either pay more, delay purchase, or forego it entirely. This is why the Swiss watch industry is alarmed: the U.S. market might shrink, hurting their sales volume. Swiss watch exports had just been growing ~5% annually​, and that growth could stall or reverse if U.S. orders are cut back. In the worst case, Swiss executives fear a scenario akin to the 2019 China slowdown (when a crackdown on gifting and a weaker economy hurt watch sales): the U.S. could become a weak market, forcing brands to rely more on Asia and the Middle East to meet targets.

Secondary Market and Investment Pieces

The secondary market for luxury watches – which includes pre-owned watch sales and dealers trading outside official brand boutiques – is also poised for significant changes. In recent years, popular models (like the Rolex Submariner, Daytona, Patek Nautilus, AP Royal Oak) often trade above their retail price on the secondary market due to scarcity. Tariffs could further upset this delicate balance of supply and demand:

• Higher new prices generally push up pre-owned prices. If a new Rolex now costs, say, 30% more with tariffs, pre-owned examples of that model will also command higher prices because the alternative (buying new) just got costlier. Analysts predict “a minimum of 10% and a maximum of 31% increase on secondary market prices once the tariffs kick in”​, in line with the range of tariff rates. In other words, the secondary market is expected to mirror the tariff-induced inflation seen at retail. We may see an immediate jump in asking prices on platforms like Chrono24, eBay, or watch dealer sites for unworn and lightly used pieces, especially those already in the U.S. inventory (since they avoid new import costs).

• Existing inventory becomes more valuable. Dealers who stocked up on popular watches before the tariffs can now sell them at a premium. For example, a U.S. dealer holding a brand-new Patek Nautilus that was imported in 2024 (with no 31% tariff) could sell it near the newly inflated market price, netting a windfall profit. Even individuals who bought a watch a year ago might find that its resale value in the U.S. has gone up simply because the replacement cost skyrocketed due to tariffs. This dynamic temporarily rewards those holding stock, and we have already seen smaller brands like Christopher Ward pivoting to use existing U.S. inventory or delaying shipments to avoid immediate tariff costs​ (larger brands likely did similarly, quietly redirecting some supply or using warehoused stock to buffer the short term).

• Collectors may treat high-end watches as investment hedges. There’s a scenario where savvy collectors anticipate continued trade tensions and buy coveted models now, expecting they can sell later at higher prices. In the initial weeks after the tariff news, some collectors indeed rushed purchases (as noted earlier) – essentially “investing” in watches before prices climbed further. If inflation and tariffs persist, hard assets like Rolex watches might be seen (to some extent) as a store of value. However, this is a double-edged sword: if the tariffs lead to a broader economic downturn or reduced enthusiasm for luxury spending, the secondary market could eventually soften.

• Market bifurcation: We might see differences between grey-market new and true pre-owned pricing. Grey-market dealers (selling unworn watches outside brand boutiques) will face the same import costs, so their prices will go up similarly. Truly pre-owned watches already in the U.S., however, don’t incur new import taxes, so those sellers have more flexibility. They could undercut the new retail price increases and still profit. For instance, after tariffs, a new Omega Speedmaster might be $9,000 at retail, while a mint condition pre-owned Speedmaster could be sold for $8,000 – still below the new price but well above what that used watch would have fetched previously. This could make pre-owned pieces relatively more attractive to buyers looking for a “deal,” possibly increasing volume in the secondary market even as overall demand in units might decline.

It’s worth noting that any severe or prolonged slump in demand (due to an economic recession triggered by trade wars, for example) would eventually put downward pressure on secondary prices. If many consumers exit the market, even scarce models could see prices cool off from recent record highs. So far, what experts foresee is a short-to-medium term price spike in the secondary market due to the tariff-driven cost shock, with the longer-term outcome dependent on macroeconomic conditions and whether the tariffs become permanent.

Luxury watch retailers in the secondary space are wary but somewhat optimistic that they can weather the storm. Paul Altieri of Bob’s Watches pointed out that after tariffs, a Rolex Submariner’s price could swell past $14,000 with tax​, which might nudge some buyers towards pre-owned options that come in a bit lower. Secondary dealers may therefore see increased interest from price-sensitive enthusiasts who still want a Rolex or Patek but are priced out of the boutique. Increased prices on new stock effectively expand the secondary market customer base.

However, if confidence in the economy erodes, even wealthy clients might sit on the sidelines. A sudden jump in watch values on paper doesn’t help dealers if no one is buying. The key will be the broader sentiment: are people feeling flush or fearful? As of now, the sentiment is cautious. The pause on tariffs has provided a brief respite, but if the full brunt hits in July 2025 (after the 90 days), the industry expects a turbulent period of adjustment.

Industry and Expert Commentary

Experts across economics, finance, and the watch industry have been vocal about the potential consequences of Trump’s tariffs on luxury watches:

• Economists view tariffs as consumer taxes. Despite Trump’s assertions that other countries pay the tariffs, the reality is that these import duties are paid by U.S. importers and ultimately by U.S. consumers through higher prices​. Former U.S. Treasury Secretary Larry Summers even likened Trump’s trade logic to “creationism” in terms of its relationship to economics, underscoring the skepticism among economists​. The Penn Wharton Budget Model projected that Trump’s tariff plan would raise prices broadly and shave about 6% off long-run U.S. GDP​. For luxury goods specifically, the effect is inflationary: “Tariffs will send costs soaring,” one Economist headline warned, noting that many firms will feel compelled to raise prices to maintain margins​. This includes luxury watch brands, which have strong pricing power due to brand prestige but also risk losing customers at some point.

• Watch industry analysts highlight pressure on Swiss brands. Financial analysts at JPMorgan flagged Swiss watchmakers as particularly vulnerable​. The combination of heavy reliance on U.S. buyers and the steep 31% tariff means companies like Rolex’s parent (privately held) or Richemont (which owns Cartier, Vacheron Constantin, etc.) could see U.S. sales volumes decline. A report in Revolution Watch magazine predicted a 10–31% rise in secondary-market prices and suggested that watch enthusiasts should brace for significant price hikes across the board once tariffs fully hit​. Analysts also note that price hikes might not fully offset lost volume – some brands could end up with lower revenue if a chunk of customers drop out of the market due to higher prices.

• Swiss industry officials and executives are “shocked” and seeking solutions. The Federation of the Swiss Watch Industry and executives of major brands have been reportedly scrambling in response to the tariff threat. Audemars Piguet quickly convened an internal task force to devise adjustment strategies and “evaluate all options” after Trump’s announcement​. A spokesperson for Audemars Piguet emphasized supporting their teams and clients through the uncertainty​. Behind the scenes, Swiss officials are likely engaging in diplomacy – Switzerland’s economy is small (under 10 million population) and it has a free trade orientation, so this aggressive U.S. tariff is viewed as unjustified. As mentioned, industry voices like Mike France have argued the Swiss have a case to negotiate the tariff down given the lack of a U.S. competitor and the imbalance of penalizing goods but not services trade​. Switzerland’s hope is to use that “strong negotiating position” to at least reduce the 31% rate, but there is an acknowledgement that “some sort of tariffs are likely to remain in place as long as the current administration is in power.”​ In other words, they may aim for a lower rate or carve-outs, but are not expecting a full reprieve under Trump.

• Luxury retailers and brands are adapting strategy. We’ve already seen direct statements from retailers like Hermès (in the fashion realm) confirming they’ll raise U.S. prices to offset tariffs. In the watch retail space, authorized dealers are in a tricky spot – many operate on fixed prices set by brands. If/when brands raise those prices, dealers must implement them. Some retailers could try to offer small discounts or perks to retain customers facing sticker shock, but deep discounting on top luxury brands is unlikely (and often not permitted by brand policies). Meanwhile, secondary market retailers like Bob’s Watches see a potential uptick in business as discussed. Bob’s CEO Paul Altieri noted the price calculations that consumers are facing and implied that his store is preparing for a scenario where new Rolex prices push more buyers to consider pre-owned​. We might also see retailers reallocate inventory in the global market – for instance, if U.S. demand cools, Swiss brands might send fewer hot models to the U.S. and more to Asia or the Middle East, where demand is strong and tariffs aren’t an issue. Such shifts could further constrain supply in America, paradoxically supporting higher prices for the pieces that do arrive.

• U.S. consumer sentiment and behavior experts suggest there is a psychological impact of the tariffs on luxury buyers. Buying a luxury watch is often as much an emotional decision as an economic one. Constant news about tariffs and trade wars can sour the mood. A new AP-NORC poll found the majority of Americans expect higher prices as a result of Trump’s tariffs and are concerned about inflation​. If consumers psychologically blame the tariffs for making luxury goods “too expensive” or if it just adds a layer of negativity to the purchasing experience, that could dampen the enthusiasm that drives the luxury market. Some buyers might delay purchases in hopes that the tariffs are rolled back later or if a new administration might reverse them after 2025.

In summary, expert commentary converges on a view that these tariffs will raise prices for U.S. luxury watch buyers, likely reduce demand, and upset the finely tuned global luxury market dynamics. Economists warn it’s essentially a tax on consumers with broader economic downsides. Watch industry analysts foresee significant pricing pressure and are watching how brands respond. Industry leaders are alarmed but trying to strategize a path forward, whether through lobbying, pricing adjustments, or finding new markets. And retailers – both primary and secondary – are bracing for a new normal of higher prices and possibly a more challenging sales environment.

Too Long To Read (TLTR)

Donald Trump’s proposed 2025 tariffs stand to reverberate through the luxury watch market in the United States. The steep import duties (20–30%+ on key sourcing countries) directly translate into higher costs for Swiss, German, and Japanese timepieces, which means Americans will be paying substantially more for the same watches. We can expect notable retail price increases for marquee brands like Rolex, Patek Philippe, Audemars Piguet, and Omega if the tariffs fully take hold – on the order of thousands of dollars extra per watch. This shock to prices will test the resilience of consumer demand in the high-end watch segment. While ultra-rich collectors may take the hit in stride (or even accelerate purchases now), a broader swath of customers is likely to think twice, potentially leading to a dip in U.S. sales for luxury watchmakers.

On the secondary market, prices are poised to rise in tandem, making sought-after models even more financially elusive, though pre-owned dealers could see increased activity as buyers seek relative bargains. In the longer term, the tariffs could alter global distribution of watches (with brands shifting focus to regions outside the U.S.) and even reduce the cultural cachet the U.S. has as a prime market for luxury launches and boutiques.

Industry stakeholders are not sitting idle: they are considering pricing strategies, lobbying efforts, and contingency plans. As one Swiss watch CEO hinted, they will push for tariff reductions by highlighting that American consumers and businesses shoulder the cost​ and that there’s no local industry to protect. Whether these arguments will sway U.S. policy remains to be seen. In the meantime, the consensus is that as long as Trump’s trade stance remains unchanged, higher prices and a choppy market are the new reality for luxury watches in America. Buyers and sellers alike will need to navigate this period carefully – whether that means buying before further hikes, adjusting inventories, or simply sitting tight until there is more clarity on the trade front.

Sources:

Associated Press – Trump’s tariff announcement details​
Business Insider – Analysis of impact on Rolex and Swiss watch prices
Hodinkee – Industry reactions and pricing responses in watch sector​
Reuters – Effects on global luxury market and U.S. luxury demand​
Euronews – Luxury brands (Hermès, etc.) passing on tariff costs to consumers​
Penn Wharton Budget Model – Economic analysis of Trump’s tariffs​
The Economist – Projected impact of tariffs on consumer prices and business responses​
Revolution Watch – Predictions for secondary market price increases​
Statements from industry executives (Audemars Piguet, Christopher Ward) on tariff response​