In a sweeping expansion of his trade agenda, President Donald J. Trump signed Executive Order 14308 on July 31, 2025 — an update to April’s Executive Order 14257 — which declared America’s persistent trade deficit a national emergency. Among the most notable provisions in this new order is a hefty 39% ad valorem tariff on all goods imported from Switzerland.

That includes Swiss clocks and watches, a category that accounts for over $6 billion in U.S. imports in 2024. According to the administration, Switzerland remains one of several trading partners that have failed to offer “sufficient reciprocity” in trade negotiations and have not aligned closely enough with U.S. national and economic security priorities.

How will the 39% tariff impact the Swiss watch industry?

This new tariff presents a seismic jolt to the Swiss watchmaking industry, particularly brands that rely heavily on the U.S. as a key export market. Brands like Rolex, Patek Philippe, Audemars Piguet, and Omega will now face increased costs that could be passed on to retailers and collectors, or absorbed at the expense of margins.

Many luxury watchmakers are still recovering from pandemic-era slowdowns, inflationary pressures, and the ripple effects of geopolitical disruptions. The 39% tariff now adds a layer of trade friction unseen since the Smoot-Hawley days (the Tariff Act of 1930). For independent brands and niche maisons hoping to gain a foothold in the U.S. market, the road just got much steeper.

Will prices of Swiss watches rise in the U.S.?

With a 39% tariff layered on top of existing import duties and retail markups, the cost to bring a Swiss watch into the U.S. could rise dramatically. Distributors, retailers, and brands will have to decide whether to absorb the additional cost, reduce profit margins, or pass it on to consumers.

For some brands, particularly those in the ultra-luxury tier, the price inelasticity of demand may soften the blow. But for mid-tier manufacturers or those that already carry long waitlists and grey market premiums, the pricing calculus could become complex.

The watch industry’s Switzerland-centric supply chain — where even case polishing and balance spring production are highly specialized and local — means rerouting or reclassifying production to avoid tariffs isn’t a straightforward option.

Could this trigger a shift in watch production or distribution?

Brands may explore partial assembly outside of Switzerland to mitigate tariff exposure, a tactic previously considered during past geopolitical tensions. However, this comes at a cost to the “Swiss Made” designation, which requires a certain percentage of value creation within Swiss borders.

Alternatively, U.S. retailers could reduce inventory intake or pivot toward non-Swiss brands like Japan or Germany, which are not currently subject to such steep duties. Both countries are looking at a mere 15%.

Trump’s executive order asserts that these tariffs are not merely punitive but strategic, meant to pressure non-aligned countries into fairer trade agreements that support American industries and protect national security interests. The administration claims that “lack of reciprocity” and “unfair trade barriers” have eroded America’s manufacturing base and contributed to a national emergency.

Still, critics argue the order uses a blunt instrument, one that may alienate key allies and hurt U.S. businesses and consumers more than its intended targets.

What should collectors and retailers do now?

The 39% tariff takes effect seven days after the executive order’s signing. Collectors, retailers, and distributors may attempt to accelerate shipments before the new duties kick in, but options are narrowing by the hour.