How U.S. Tariffs Could Reshape the Watch Market: The Impending Price Surge and Market Shifts

How U.S. Tariff Changes Are Reshaping the Luxury Watch Industry in 2025

The Changing Landscape of U.S. Tariffs: An Overview

 

Tariffs—those taxes imposed on imported goods—are not just a political maneuver but have real-world consequences on industries, markets, and the consumer. As of 2025, U.S. tariffs on Swiss luxury watches have taken center stage, disrupting the finely tuned world of horology. For decades, luxury Swiss timepieces have been synonymous with craftsmanship and exclusivity. But now, these iconic brands like Rolex, Patek Philippe, and Audemars Piguet face the sharp sting of a 31% tariff on top of the existing 10% universal tariff on foreign goods.

Why does this matter? Because for luxury watchmakers, the U.S. has long been the largest market for high-end timepieces. According to the Federation of the Swiss Watch Industry, Swiss watch exports to the U.S. accounted for more than $4 billion in 2024, twice as much as its second-largest market, China. With tariffs now escalating, these luxury brands must reconsider how they operate within one of their most profitable markets. The U.S. tariffs on Swiss watches include an additional 31% on top of the existing 10% universal tariff.

Price Hikes and the Impact on Consumers

 

Let’s get one thing straight—tariffs mean higher prices. It’s inevitable. With an additional 31% tax on Swiss-made watches entering the U.S., watch prices are set to increase. While affluent buyers won’t bat an eye at a few thousand dollars more on their Rolex Submariner or Patek Philippe Nautilus, the average enthusiast or collector may find themselves priced out.

What does this mean for the everyday buyer? While some may still indulge in high-end watches, others will be forced to turn elsewhere. As a result, prices on new models will likely skyrocket, making them less accessible. But it doesn’t end there—this shift will also influence buyer behavior, leading many to seek out alternative options, especially from the secondary market. As noted in a Business Insider article, the pre-owned market for luxury watches has been stabilizing despite rising retail prices, with increasing interest from U.S. consumers looking for better deals.

A Booming Secondary Market: Pre-Owned Watches to the Rescue

As Swiss watches become more expensive, many buyers will inevitably shift to pre-owned models. The secondary market has already been growing rapidly, as evidenced by Deloitte’s 2024 Swiss Watch Industry Insights, which highlighted the resurgence of interest in pre-owned luxury watches. This trend has intensified in 2025, with many collectors now seeing pre-owned watches as a better deal compared to purchasing new ones.

But why is the secondary market flourishing? It’s simple: as new watches climb in price, the allure of pre-owned models becomes too strong to ignore. These models, especially limited editions or vintage pieces, are not just affordable alternatives but also investment opportunities. After all, watches like the Rolex Daytona or Patek Philippe Grand Complications can appreciate over time, making them desirable not just for their craftsmanship but also as assets.

The gray market—where watches are sold by unauthorized dealers—is also thriving. While the gray market isn’t illegal, it poses challenges for brands, especially when it comes to warranty and authenticity. This increasing demand for pre-owned watches, particularly from rare and high-demand models, signals a shift in the luxury watch ecosystem, which is discussed further in an article on Wristaficionado.

Microbrands: The Silver Lining for Smaller Players

While the larger Swiss luxury brands may struggle under the weight of these tariffs, smaller microbrands might find a unique opportunity. Unlike established Swiss brands that rely heavily on imports and expensive materials, microbrands often operate with lower price points and less complex supply chains. These advantages could allow them to capture the attention of consumers seeking quality at a more affordable price.

However, there’s a catch. Many microbrands rely on components from countries like China, which could face their own tariffs. This could offset any initial gains, as production costs rise. Still, for now, microbrands could capitalize on the growing demand for value-driven watches. However, they must tread carefully with pricing adjustments. Over-inflating prices in response to tariffs could alienate the very consumers they’re trying to attract.

Adapting Retail Strategies: A New Era of Watch Distribution

For authorized dealers, the U.S. tariffs pose an undeniable challenge. Retailers are already feeling the pressure of rising costs and declining margins. To adapt, they must reassess their inventory management and pricing strategies. One clear solution is to shift focus toward selling pre-owned watches, which offer better margins and are less affected by the immediate impacts of tariffs.

Moreover, we might see a shift in the retail model itself. As brands look for ways to mitigate the effects of tariffs, direct-to-consumer strategies are becoming increasingly popular. By selling directly through branded boutiques or exclusive online platforms, brands can bypass the traditional retail channels and maintain more control over pricing. This change could represent the future of the luxury watch industry, especially for brands looking to protect their margins.

Additionally, the customer experience will be critical. Retailers may invest more in personalized services, offering everything from custom fittings to tailored after-sales experiences. This shift could build stronger brand loyalty, even as prices rise source.

Global Impacts: A Shift in Market Dynamics

 

The consequences of these tariffs won’t be felt in the U.S. market alone. Swiss watch brands are already adjusting their global strategies, potentially diverting their focus to regions with more favorable trade conditions. Asia, the Middle East, and Europe could see an uptick in demand as U.S. buyers look to alternative markets for better pricing.

Countries with more favorable tariff policies, or those with strong watch-buying cultures like Japan or the UAE, might experience increased sales as U.S. demand wanes. Meanwhile, some Swiss brands may consider moving production or assembly to countries with more favorable tariffs, potentially reshaping the global watch industry’s supply chain in the process.

The Future of Watch Collecting: A New Culture Emerges

In the long term, the effects of tariffs will likely extend beyond pricing and consumer behavior. As luxury watches become more expensive, there will likely be a cultural shift in the way consumers approach collecting. For many, watches are not just about telling time—they are about status, heritage, and investment.

Tariffs could change the way collectors perceive luxury watches, pushing them to explore independent watchmakers or lesser-known brands that are less affected by the tariffs. The rise of microbrands and non-Swiss models could introduce a new era of watch collecting, where affordability and craftsmanship take precedence over brand recognition.

Furthermore, collectors will be increasingly focused on the long-term value of their timepieces. Watches from brands like Rolex or Patek Philippe, traditionally seen as assets, may become even more desirable to investors, while other models—less tied to the brand-name value—might gain popularity for their investment potential.

Conclusion: Navigating the New Terrain of Luxury Watches

The impact of U.S. tariffs on Swiss luxury watches in 2025 is undeniable. From rising prices and shifting consumer behavior to the growing secondary market and the rise of microbrands, the luxury watch industry is at a crossroads. For some, this will mean adjusting pricing strategies, while for others, it presents a golden opportunity to cater to a new demographic of price-conscious collectors.

As the industry adapts, retailers, brands, and consumers will need to navigate these changes carefully. Whether you’re a seasoned collector or new to the world of luxury watches, 2025 promises to be a year of transformation and opportunity. Keep your eyes on the market—it’s sure to tick in some surprising directions.