Understanding the US tariff situation: What it means for Swiss watch buyers

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From crisis to resolution: the tariff journey concludes

The turbulent tariff saga that shook the Swiss watch industry throughout 2025 has officially concluded. On December 10, 2025, the United States and Switzerland formalized their agreement reducing import tariffs on Swiss goods from 39% to 15%, with the rate applying retroactively to November 14, 2025. For watch enthusiasts and collectors who watched prices climb dramatically after August, this represents meaningful relief—though the landscape has fundamentally changed from pre-2025 conditions.

The retroactive application means that importers who paid the 39% rate between November 14 and December 10 are eligible for customs refunds, creating an additional layer of complexity in the pricing adjustments now rolling through the market.

The context: a year of unprecedented volatility

To understand where we are today, we must revisit the crisis that preceded it. In August 2025, the US imposed a 39% tariff on Swiss imports, and the impact was immediate and devastating: exports of Swiss watches to the American market plummeted by 55.6%, from CHF 355 million to CHF 158 million in September alone.

Last year, watches worth CHF 4.4 billion were exported to the US, accounting for almost 17% of global Swiss watch exports. The 39% tariff threatened not just individual transactions but the fundamental relationship between Swiss manufactures and their largest market—particularly critical as other major markets like China and Hong Kong continued their decline.

Before the tariff escalation in April 2025, Swiss goods typically faced duties between 0% and 2.5%. The new 15% rate, while a substantial improvement from 39%, still represents a significant increase from historical norms and is now aligned with tariff rates applied to European Union imports.

What the finalized agreement means for pricing

Now that the agreement is formalized and in effect, we're seeing concrete impacts on watch pricing. The 15% tariff is being absorbed through multiple mechanisms:

Immediate price increases: Major brands have announced 2026 price adjustments. Rolex, for example, is implementing an average 7% price increase effective January 1, 2026—the third increase in a single year. Gold models will see approximately 9% increases, while steel watches will rise about 5.6%.

Brand strategies vary significantly: Different manufactures have handled the situation using distinct approaches. Rolex conservatively raised prices during the 39% tariff period and is now implementing measured additional increases. Patek Philippe took the unusual step of increasing prices while simultaneously reducing retailer margins to partially shield consumers. Some independent brands like A. Lange & Söhne allowed US customers to prepay orders at pre-tariff prices, correctly betting the 39% rate wouldn't last.

The inventory factor: Many brands anticipated tariffs in April and July 2025 and massively increased exports to US-based subsidiaries, building substantial inventories at various tariff rates. This means watches purchased in early 2026 may reflect different cost bases depending on when they entered the country, creating temporary pricing inconsistencies across the market.

Investment and collecting implications for 2026

For collectors considering acquisitions, several strategic factors have emerged from this experience:

Pre-owned market dynamics: The certified pre-owned segment has gained substantial market share during the crisis. Rolex's Certified Pre-Owned program now controls approximately 10% of the global secondary market for its watches. However, Rolex is expected to increase CPO prices in line with new watch pricing, meaning the pre-owned advantage may narrow.

Timing windows: As retailers work through inventory imported at different tariff rates, short-term opportunities may exist. However, brands are moving quickly to normalize pricing around the 15% rate structure. The window for finding watches at older price points is closing as we enter 2026.

Currency pressures compound tariffs: Beyond tariffs, the weakening US dollar against the Swiss franc adds additional cost pressure. Combined with record gold prices, collectors face a multi-factor cost increase environment. This may drive continued interest toward non-gold materials like titanium, platinum, and ceramic.

Market consolidation expected: Industry analysts predict significant consolidation in 2026, with some boutique closures and potential merger and acquisition activity. Watches of Switzerland Group, despite posting strong results through the tariff period, is expected to pursue acquisitions to expand its market position.

The Swiss investment commitment

The tariff reduction came with substantial commitments from Switzerland. Swiss companies are planning direct investments in the US worth $200 billion by the end of 2028, extending across all 50 states to create manufacturing and research and development jobs.

Additionally, Switzerland has agreed to reduce tariffs on American agricultural products, establishing duty-free quotas for 500 metric tons of beef, 1,000 metric tons of bison meat, and 1,500 metric tons of poultry annually. The deal will also lift tariffs on certain aviation parts, rubber products, cosmetics, and generic drugs.

For the watch industry specifically, this investment commitment suggests increased American operations from Swiss brands—potentially expanded service centers, technical training facilities, or component sourcing partnerships, though core mechanical watchmaking will remain in Switzerland.

Global market context

The US tariff situation doesn't exist in isolation. While the US market weathered the storm better than anticipated—luxury watch demand proved remarkably resilient with brands reporting robust sales for core Swiss models—other markets continue facing challenges. China and Hong Kong declined 25.8% and 18.7% respectively in 2024 compared to the previous year.

However, growth markets are emerging. India continues its boom with 7% increases, and Mexico is establishing itself as a major Latin American center with CHF 337 million in exports. Japan and Germany, the two biggest non-Swiss luxury watch exporters, face the same 15% US tariffs, meaning no relative competitive advantage shifts between Swiss brands and manufacturers like Grand Seiko or A. Lange & Söhne.

What watch buyers should know entering 2026

For those considering luxury watch purchases in the coming months, several practical recommendations emerge:

Expect continued price adjustments: The 15% tariff rate is now built into brand pricing strategies for 2026. Catalogs have been updated, and authorized dealers are implementing new recommended retail prices. Don't expect rollbacks—prices rarely decrease in luxury goods.

Verify acquisition timing for pre-owned pieces: When purchasing from the secondary market, the tariff situation has less direct impact, but supply dynamics have changed. The surge in CPO programs and the shift toward secondary markets during the 39% period has created inventory fluctuations that present both opportunities and challenges.

Consider the total cost picture: Beyond tariffs, currency movements and raw material costs (particularly gold) are driving price increases. A gold Rolex will see approximately 20% cumulative price increases compared to late 2024. Budget accordingly when planning significant acquisitions.

Build relationships with authorized dealers: The tariff volatility has reinforced the value of strong dealer relationships. Those with established connections had better access during the supply disruptions and will likely receive priority as allocations normalize.

Watch for market consolidation effects: As boutiques close and retailers consolidate, local availability may shift. Online channels and multi-brand platforms may become relatively more important for access to certain references.

Maintain long-term perspective: For collectors building meaningful collections, tariff fluctuations and currency movements represent short-term volatility in fundamentally sound assets. Quality timepieces from established manufactures have historically maintained value across various economic conditions. The 99-day period of 39% tariffs will likely be viewed as a brief anomaly in the long arc of Swiss watchmaking history.

The road ahead

The 39% tariffs, in effect for just 99 days, caused significant damage to what had been the Swiss watch industry's most important and stable market. The reduction to 15% provides relief and restores some predictability, but the industry operates in a permanently changed landscape.

Key lessons learned include: heightened awareness of geopolitical risk in luxury goods markets, the importance of inventory management and supply chain flexibility, the growing strength and legitimacy of the certified pre-owned segment, and the recognition that Swiss luxury watchmaking, while culturally and artisanally centered in Switzerland, must adapt its business models to an unpredictable trade environment.

For Swiss watch dealers and collectors alike, 2026 begins with greater clarity than 2025 ended. The 15% tariff rate provides a stable foundation for planning, even if it represents a higher cost structure than the industry enjoyed for decades. The American market's resilience—posting growth even under extreme tariff pressure—demonstrates the enduring appeal of Swiss mechanical watchmaking.

As brands implement their 2026 pricing and allocation strategies in the coming weeks, the immediate future looks more predictable than any point since April 2025. Yet the experience has reminded all stakeholders that in luxury goods, as in international trade, assumptions of permanence can prove fragile. The collectors and businesses who thrive will be those who remain informed, flexible, and focused on enduring value rather than temporary market fluctuations.

This article reflects the tariff situation as of January 2026, following the December 10, 2025 formalization of the US-Switzerland trade agreement. Tariff situations remain subject to change. Consult with tax and customs professionals for specific import guidance.