The 39% Swiss Watch Tariff
In 2022 I publicly called the top of the watch market. That was not speculation. It was a calculated read of fundamentals, liquidity, and sentiment. Prices had outrun reality, and the correction that followed played out exactly as expected.
This time I am not calling a top. I am laying out a scenario, and it is one we have seen before: prices rising overnight on distortion, not demand.
The newly announced 39 percent tariff on Swiss watch imports into the United States is an artificial distortion, not a market-driven shift. It is government policy layered on top of one of the most globalized industries in the world. Whether this holds or gets rolled back will shape outcomes for both dealers and collectors. My view is clear: I do not believe these tariffs will stick. But until they are reversed, they create conditions worth watching very carefully.
The Immediate Impact
By law, the tariff applies to any watch whose country of origin is Switzerland. That means new, pre-owned, or vintage. If it is Swiss-made, it is covered.
Already we are seeing dealers who rely on imported stock, particularly from markets like Japan, listing watches at prices that reflect the nearly 40 percent spike. The danger here is twofold:
These dealers are likely out real money if prices reverse.
The longer they continue to source at tariff-driven levels, the higher the percentage of their inventory that is exposed to a potential rollback.
This is the early stage of my worst-case scenario: dealers rotating into inflated inventory that only makes sense at the artificial tariff price level.
Supply Already Stateside
There is already significant Swiss watch supply in the United States, particularly modern pieces which trade more like commodities. That inventory will need to be cycled through before the market adjusts to the full 39 percent.
If brands are forced to raise retail prices, expect some holders to take advantage of the artificial spike. Prices will rise, but not to the full tariff level overnight. The backlog comes first.
The Real Catalyst: Brand Price Adjustments
So far the big brands, Rolex, Patek Philippe, Audemars Piguet, have not raised U.S. retail prices to reflect the tariff. That silence is telling.
It is highly likely that brands frontloaded supply into the United States before the tariffs took effect. If Rolex shipped two years of watches ahead of time, they can effectively shield themselves and their retailers from passing along higher costs until this plays out. That buys time.
The real catalyst for sharp moves in the market will come if and when brands officially raise prices. At that point, the consumer sees the tariff in black and white, and the "new normal" gets established. If brands are forced to lift retail pricing 30 to 40 percent overnight, it will meet massive resistance. Many customers will either delay purchases or step back entirely.
Until that moment comes, much of the inventory in the U.S. is still priced off pre-tariff economics.
Why I Do Not Think These Stick
The United States is the largest market for Swiss watches. Switzerland cannot afford to lose it, and the United States knows it. We are already seeing signals of rapid dialogue from Swiss leadership, which underscores just how much pressure exists on both sides to find a resolution.
This administration has a track record of opening with extreme positions, using tariffs as leverage, then negotiating back toward compromise. In past trade disputes, that has meant initial policies created short-lived chaos but were softened before permanent damage set in.
I expect the same outcome here.
My Advice
For Collectors: If you have been eyeing a modern Swiss watch, act while pre-tariff inventory still exists. Otherwise, wait. The price you see today may not hold once this settles.
For Dealers: Do not confuse a tax with a trend. Be deliberate in your buys, preserve liquidity, and avoid chasing tariff-driven prices as if they were organic. If you are leveraged, be twice as cautious. Do not rotate your entire book into tariff-driven pricing as if it is permanent. That is how markets trap people.
Final Word
This is not a moment for bold predictions. It is a moment for discipline. The real risk is not the tariff itself, it is how market participants react to it. If you mistake a temporary distortion for a lasting shift, you will pay the price.
I do not believe these tariffs will last. But if they do, the adjustment will come fast and brutal for those caught leaning the wrong way. Fundamentals always win. The only question is whether you are still standing when they do.
