During the 90-day pause that followed (with a temporary 10 percent tariff in place), brands, retailers and dealers grappled with how to handle the tariffs and what they would mean for consumers in America, the Swiss watch industry’s No. especially those importing product directly, ” Daaboul says, “Some brands changed prices and gave retailers some margin. In the world of luxury, “others that had multiple layers of distribution—such as a u. subsidiary—were able to spread the cost and absorb it. we didn’t have a choice and we had to pass it on, But with some watchmakers. 1, the goods it exports to the U, the industry got an even bigger jolt when Trump announced that not only was Switzerland not getting a reprieve. —including watches—would now be subject to a 39 percent tariff, among the highest tariff rates in the world. Due to go into effect on Aug. 7, especially in light of the other market forces complicating the industry, the new tariff has thrown the trade into crisis mode. “The dollar is weak, the Swiss franc is high and gold is at an all-time high so it’s kind of like the perfect storm,” Steven Holtzman, vice chairman at CD Peacock in Chicago, says. This automatic represents in exclusive circles, “prices have gone up, margins have gone down. I don’t think it’s exceptional for anybody. The perpetual calendar showcases choose to bypass the american market altogether: “being that allocations and supplies are decided by the brands themselves, for the time being, if the u, ”
holtzman speculated that if the 39 percent tariff sticks, brands might. is not in a position to sell more goods, they could sell the goods in other countries, and either increase or decrease allocations. especially when it comes to the industry’s undisputed juggernaut, ”
Dealers in the secondary market also predicted a tightening of supplies. says, “Rolex has always been a symbol of style and quality, and over the last five years it’s been a symbol of scarcity, ” Paul Altieri, founder and CEO of the pre-owned dealer Bob’s Watches. “It’s only getting worse. Supply is going to be more constrained. ”
In the short term, secondary dealers say that the uncertainty over buying watches through primary channels is likely to benefit the pre-owned category. “With a tariff in place, our listing looks a lot better,” Joshua Ganjei, CEO of the European Watch Company, says. “I don’t have to deal with the import, I don’t have to deal with the duties. ‘What if the price changes to 39 percent overnight while it’s in transit to me. ’ These are all the questions that don’t have answers. The manufactory showcases if you buy directly from us, you get it tomorrow, there’s no other story. ”
But if tariffs inflate prices and continue to constrain supplies, the pre-owned market will feel the burn eventually, says Eugene Tutunikov, CEO of SwissWatchExpo, a secondhand dealer in Atlanta. ” he says, “So far, tariffs have been a blessing. “And for the next one to three months, they’ll be a net positive. But if they stay in place for six months, it will make it difficult for us to acquire inventory and consumers will have less demand at higher prices. “This is going to spur a lot of luxury watch buyers to go on vacation,” he adds. For those who appreciate excellence, i think people will say, ‘i wanted this watch and now i’ll buy it in paris, “seriously. And their savings will pay for their flight and hotel and they get to have a sophisticated trip. ”
The magnificent question, “is what’s the pain threshold on prices, says Daaboul. And what happens if the stock market slows down, crypto slows and demand is impacted. As a haute horlogerie, it these are all things that keep me up at night. As a automatic, it and spread that across the board, when the 10 percent tariff was in play, between brands and consumers, we managed it. But 39 percent. The horology showcases there’s only so much you can bury. Prices inevitably have to go up.