Luxury Watch Tariffs: How the US Trade Policies Affect the Industry
Richard Eiseman Jr. — CEO of Eiseman Jewels in Dallas — is staring down some head-turning tariffs for luxury watches that are affecting the whole of the U.S. But he’s hardly in a panic.
“I don’t anticipate a great deal of change,” Eiseman said. “And we’re hopeful that this will settle.”
Understanding the Tariffs
The White House recently rolled out 39% tariffs on Switzerland, where many of the world’s finest luxury watches are made. That’s a steeper rate than many other countries and regions, such as the European Union and Japan.
Amid concerns in Switzerland, a government delegation headed to the U.S. to negotiate the tariffs last week, according to Reuters, as the industry looked for relief for its luxury watches that can run into the tens of thousands of dollars. But the higher percentage of 39%, after an increase earlier this year, went into effect for the country, whose brands include Rolex and Patek Philippe.
Impact on the Luxury Watch Industry
Eiseman declined to speculate on what could happen with prices. He added that July was the company’s best month of the year for watch sales. The store offers about a half dozen Swiss-made watch brands, he said.
The Swiss are well-positioned, he said, noting that consumers still want the luxury watches even when supplies are limited.
“I think it’s way too early,” Eiseman said, noting any comment on prices would be speculation. “We feel comfortable that the watch industry was prepared for this in many ways. … I just don’t think the increases, if they do come, will be stifling as long as you’re offering value.”
Luxury Watch Market in North Texas
North Texas has a great customer base for the luxury items, said Eiseman, who also sells used timepieces that can cost more than new ones.
“Dallas has a wonderful appreciation for fine Swiss timepieces,” Eiseman said. “And we’re lucky that the consumer in Dallas appreciates fine things. It’s one of the best markets in the world for (luxury).”
Reaction from Switzerland
Whatever might happen, the tariff hit came as a surprise in Switzerland.
“To say the least, the whole country is shocked by the brutality of the new measures,” said Oliver Muller, founder of LuxeConsult, a Swiss firm that specializes in assisting the watch industry.
The new trade duties will affect the sales of Swiss-made watches, though it will be helped by bolstered inventories in the short term. Switzerland captures about 95% of the global market for watches that retail above $1,500, Muller said.
Conclusion
The luxury watch industry is facing a significant challenge with the imposition of 39% tariffs on Swiss-made watches. However, industry experts like Richard Eiseman Jr. remain hopeful that the situation will settle and that the demand for luxury watches will continue to drive sales. With a strong customer base in North Texas and a global market dominated by Swiss-made watches, the industry is likely to weather the storm.
FAQs
Q: What are the tariffs imposed on Swiss-made luxury watches?
A: The White House has imposed 39% tariffs on Swiss-made luxury watches.
Q: How will the tariffs affect the luxury watch industry?
A: The tariffs will likely increase the prices of luxury watches, but industry experts believe that the demand for these watches will continue to drive sales.
Q: What is the market like for luxury watches in North Texas?
A: North Texas has a great customer base for luxury items, with a strong appreciation for fine Swiss timepieces.
Q: How do the tariffs affect the global market for luxury watches?
A: Switzerland captures about 95% of the global market for watches that retail above $1,500, and the tariffs will likely affect the sales of Swiss-made watches.
