When Donald Trump announced for the first time customs duties of 31% for Switzerland, where most luxury watches are manufactured, he immediately aroused defensive maneuvers in the watchmaking world. The foreign supplier of an old watches reseller took an emergency flight with a suitcase filled with watches; The retailers have made reservations, fearing problems for supplying parts. Panic is a bit dropped when the Trump administration granted a 90 -day break on the most punitive customs duties, but brands continue to react to the remaining tax of 10%. This means that the most sought after watches in the world are about to become more expensive.
As reported by the specialized site WatchRolex was among the first to react: the brand has already increased its prices by around 3%. Omega should follow with an increase of 5% on average in its catalog, like others soon. If we do not yet know any specific figures, certain companies of the Swatch Group, such as Cartier, and independents like Breitling, are among the brands which will increase the retail price suggested by the manufacturer in the United States. (It’s a safe bet that the brands of the LVMH group, including Tag Heuer and Bvlgari, do so much). We must therefore expect an increase of 3 to 5% for all of these brands. Sources have also confirmed that the margin of retailers will decrease in certain cases, which will harm the approved resellers.
Even the 10% tax of Donald Trump, much less important than that initially planned, should have an impact on the market, causing price increases that could hide the appetite for new watches. In addition to slowing demand, this tax may push customers to the second -hand market. “This is not a simple change in policy, but an upheaval of how collectors will have access to luxury watches in the United States,” says Joshua Ganjei, of the Boston European Watch Company. “Customs duties will exert strong pressure on approved brands and resellers, while creating great opportunities for the second -hand market. If the recommended sales prices are increasing, collectors will seek local and/or used alternatives.”
Some brands are less concerned than others: this is the case with high -end self -employed, whose customers may be less affected by market volatility and customs rates. Edouard Meylan, CEO of H. Moser & Cie, was certainly surprised by the initial tax of 31%. “But we remain serene,” he says. Our relations with American retailers are based on trust, the long term and mutual respect. The majority of orders for the coming year have been placed well before Donald Trump’s announcement and, at this stage, we do not expect a wave of cancellations. Many of our partners are convinced that the situation will evolve and that it can be resolved. ” Edouard Meylan adds that as soon as the initial customs duties of 31%were announced, his brand sent products before this tax comes into force. As we know, Donald Trump quickly reversed, but even the 10% customs duties are likely to create a prices shock from approved resellers.
Admittedly, watches are luxury items because no one really needs to have one on the wrist. But the repercussions of Donald Trump’s trade policy will certainly be felt, not only on American consumers, but also on watchrs and retailers. For then, if you want to get the last Sub, Speedmaster or Tank, expect to have to save a little more.
Initially published on GQ US
