While this is not a doomsday scenario, it’s certainly a worst-case scenario for Swiss watchmaking.

After news of a proposed tariff rate of 31% first broke in March 2025, which we wrote about in April, the US has since implemented an even higher tariff rate of 39% on Swiss imports (pharmaceuticals are currently exempt), which took effect at midnight on August 7, 2025.

Watchmaking Country Rates

Announcing the initial 31% reciprocal tariff on Swiss imports during the 2025 Watches and Wonders trade sent shockwaves across the Swiss watch industry — and made it clear the US was taking a gloves-off approach to negotiations with Switzerland.

Still, I don’t think anyone could have predicted such a dastardly tariff rate for Switzerland, which at 39% is the highest amongst key watchmaking countries. The UK and Russia are at the baseline rate of (10%), Germany, France, and Japan import tariffs sit at a reasonable (15%), and even China/Hong Kong received a more favorable rate of (30%).

Impact of 39% Import Tariff

Rolex and Omega, and many other Swiss watch brands have already raised their prices by 3% to 10%, in anticipation of the potential 31% tariffs, but that was presuming the tariff rate would go down, not up. Now, more price increases could be forthcoming.

The 39% Swiss import tariff is applied to the wholesale value of the goods, which mitigates the cost, compared to being applied at the retail price. But there’s no way around the fact that the cost to import Swiss chocolate, tools, Gruyère cheese, Swiss Army knives, and, of course, timepieces, has gone up significantly.

Potential Silver Lining

There could be a silver lining if pre-owned watch sales continue an upward trend, especially if momentum is maintained even after already imported pre-owned Swiss watch inventory diminishes.

There may even be a spike in sales of existing new Swiss timepieces that have already been imported to the US; however, once that inventory sells out, any new imports will be fully impacted by the higher tariff rate.

Considering that luxury watches can be Veblen goods, which means demand increases as price increases, inflated prices could theoretically boost sales at some watch brands (Rolex, Patek Philippe, Richard Mille, etc). However, entry-level watches and brands without strong recognition are unlikely to benefit in any measurable way from price increases.

Final Thoughts

It’s unclear how the cost of the new tariff rate will be applied to the retail pricing of Swiss watches in the US.

Brands could absorb some or all of the cost, especially those that had already raised prices. Alternatively, Swiss watchmakers could split the cost between themselves, distributors, and retailers, or they could even raise prices worldwide to offset the increases in the US.

Bear in mind, the US represented 16.8% of total Swiss watch exports in 2024, according to Reuters, making it the largest market in the world for Swiss watches.

Although the worst-case scenario is happening, tariff negotiations are still ongoing, and a better rate may still be attainable, which is crucial considering the US is Switzerland’s most important market.