39% Tariff on Swiss Imports Sends Shockwaves Through Luxury Watch Industry

Luxury watch collectors may want to think twice before stepping into a Rolex boutique this year. The Trump administration’s newly announced 39% tariff on Swiss imports threatens to push U.S. retail prices for high-end timepieces sharply higher.

The White House unveiled its updated tariff plans on Thursday, raising the proposed rate from the 31% announced earlier this year. The move caught the global watch community off guard, with Switzerland, home to brands like Rolex and Cartier, at the epicenter.

Eugene Totonikoff, CEO of the Swiss Watch Market, told Business Insider the announcement was “a real shock” and that “its effects will be immediate.” Swiss President Karin Keller-Sutter expressed disappointment, saying the 39% rate far exceeded expectations.

Leading brands, including Rolex, have already increased U.S. prices this year, likely in anticipation of higher duties, according to a July report from Morgan Stanley on the Swiss watch market. U.S. imports of Swiss goods have faced a baseline tariff of 10% since April, but the new 39% duty, set to take effect August 7, would dramatically raise costs for luxury watchmakers and could shrink U.S. inventories.

While Switzerland can still negotiate with Washington, collectors and dealers may soon have to adjust to a new reality: higher prices or fewer available pieces.

Joshua Ganjee, CEO of European Watch Company, predicts more buyers will turn to pre-owned luxury watches instead of newly imported Swiss models. “For many American collectors, a 39% tariff makes new Swiss releases a luxury that’s harder to justify,” he said.

Morgan Stanley’s report noted that second-hand watch dealers have already seen stronger demand this year as Swiss brands raised their U.S. prices. While pre-owned watch prices have generally fallen since mid-2022, that decline has slowed.

However, demand pressure could soon reverse the trend. Although existing U.S. stock won’t be hit by the new tariff, Totonikoff warned the secondary market will likely respond “much faster” than major retailers. He expects pre-owned prices to climb by as much as 10% next month and up to 35% within six months as buyers shift toward available inventory.

“This is not just a tax,” Totonikoff said. “It’s a seismic event that will create a stark divide between the new and pre-owned watch markets.”