Why Watch Investors Should Celebrate The New US-Switzerland Tariff Deal

In August 2025, U.S. tariffs on Swiss watch imports suddenly jumped to 39%, the steepest rate in the developed world, and the luxury watch industry moved into full crisis mode.

Collectors watched in dismay as major brands including Rolex, Patek Philippe, and Omega rushed shipments into America before the duties took effect, then raised U.S. prices by 5% to 15% to offset the shock.

The entire investment thesis for Swiss watches seemed threatened by policy decisions that had nothing to do with craftsmanship or demand.

The turning point came in mid-November 2025 when Switzerland and the U.S. announced an agreement slashing the tariff from 39% down to 15%, finally aligning Swiss treatment with Japan and EU watch-producing nations.

This matters enormously because the United States represents roughly 20% of Swiss watch exports globally, making it the largest single-country market for luxury timepieces. Tariff relief on that scale doesn’t just stabilize pricing but removes a major threat that was actively eroding watch investment values and pushing collectors toward panic selling or abandoning the category entirely.

How the Tariff Reduction Protects Watch Investment Values

The most immediate impact shows up in price stabilization that prevents the kind of runaway inflation that destroys collector portfolios. Brands that lifted U.S. retail prices by 5% to 15% to offset the 39% tariff during the late summer now have breathing room under the 15% rate.

Swatch’s CEO explicitly flagged those 5% to 15% increases after the August announcement, and similar moves rippled across the industry as brands scrambled to maintain margins.

With the duty cut to 15%, the pressure for additional price hikes in 2026 largely disappears, protecting the value of watches already in collector hands rather than forcing another round of increases that would make existing inventory look overpriced.

The corporate impact was hitting real numbers that threatened the entire Swiss watch ecosystem. Richemont, the conglomerate behind Vacheron Constantin, IWC, Cartier, and Jaeger-LeCoultre, warned the 39% tariff could cost up to €300 million in fiscal 2026 if left unchanged.

That’s not a rounding error but a material hit to profitability that would have forced difficult decisions about pricing, production, and market prioritization. The November tariff cut avoids that much larger second-half financial damage and supports margin repair across the group, which translates directly into stability for the brands collectors actually care about.

The secondary market benefits perhaps most directly from tariff normalization. The 39% duty pushed U.S. retail pricing higher and dampened transaction appetite in ways that showed up clearly in the data.

Swiss watch exports to the U.S. dropped 56% year-over-year in September 2025, a collapse that reflected buyers simply refusing to transact at inflated prices.

Restoring the rate to 15% normalizes pricing dynamics and improves liquidity conditions for resellers, which matters enormously for anyone holding watches as investments who might need to exit positions without taking catastrophic losses.

For investment-grade marques like Rolex, Patek Philippe, and Audemars Piguet that already pushed through price increases during the crisis period, the tariff cut means they’re far less likely to keep ratcheting prices in 2026 purely for duty coverage. This supports current portfolio valuations by preventing the kind of continuous inflation that makes earlier purchases look foolish and erodes confidence in the category.

When Patek raised prices 15% in response to the tariff, collectors holding existing pieces benefited from scarcity-driven appreciation. But if that 15% increase had been followed by another 10% in 2026 and another 8% in 2027, the gains would have been diluted by market confusion about whether prices reflected genuine demand or just cost pass-through.

The industry was already battling high gold prices pushing past $4,000 per ounce and foreign exchange pressures from Swiss franc strength. Removing the extreme 39% tariff reduces the stacked headwinds that were weighing on corporate earnings and pricing strategy simultaneously.

When you’re dealing with multiple margin pressures at once, each additional problem compounds rather than just adding arithmetically. Tariff relief doesn’t solve the gold or currency issues, but it removes one major variable that was making everything else harder to manage.

The Market Stability and Growth Implications for Collectors

Industry confidence improved remarkably quickly once the tariff deal materialized. Richemont Chairman Johann Rupert had called the 39% rate a “misunderstanding” and warned it was “potentially devastating” for Switzerland, language that captured how seriously the industry viewed the threat.

Once resolution came into sight, that rhetoric softened considerably as executives realized they’d avoided a scenario that could have fundamentally reshaped market dynamics for years.

At the same time, the structural importance of restoring competitive parity can’t be overstated. A 15% U.S. tariff rate restores alignment with EU and Japan benchmarks, defusing a Swiss disadvantage that risked long-term market share erosion.

When one producing country faces dramatically higher duties than competitors, brands eventually shift production or sourcing to avoid the penalty. Switzerland’s watch industry is built on centuries of tradition and infrastructure that can’t easily relocate, but sustained 39% tariffs would have forced painful adaptations that could have permanently damaged Swiss watchmaking’s dominance.

Market watchers captured the sentiment shift clearly as the policy path became apparent. Swiss watch stocks rallied on the prospect and then the confirmation of tariff relief, with analysts upgrading recommendations as the tariff cloud lifted. For example, Vontobel moved Richemont to ‘buy’ from ‘hold’ as fundamentals improved and the major policy risk factor disappeared.

What This Means for Your Watch Investment Strategy Going Forward

The near-term creates an interesting buying window that informed collectors can exploit before the market fully adjusts. Some brands implemented 10% to 15% U.S. price hikes in September and October to offset the 39% rate, and they’re unlikely to immediately roll those increases back now that the headline duty sits at 15%. This creates a value gap where savvy buyers can acquire watches at prices that were set for a much higher tariff environment.

The market will eventually re-harmonize pricing, but that takes time, and the period between tariff cut and price adjustment represents genuine opportunity for those paying attention.

U.S. retail was rendered completely non-competitive by the extreme 39% duty, pushing buyers toward grey market dealers or European purchases that came with their own complications. With the tariff at 15%, U.S. pricing still carries a premium versus some international markets, but it’s a manageable difference rather than the prohibitive spread that existed after August.

For portfolio allocation, the removal of this major policy tail risk argues for rebalancing back toward core Swiss houses that were tariff-vulnerable, especially if you deliberately underweighted them during the second half of 2025 when the outcome was uncertain. The thesis that drove collectors away from Swiss brands, that U.S. market access might be permanently impaired by punitive tariffs, has been disproven.

The brands with the strongest U.S. exposure, which looked like liabilities in August, now look like the beneficiaries of restored market stability.

The long-term fundamentals that make Swiss watches compelling investments are now easier to underwrite without the 39% drag on U.S. cash flows hanging over everything. The U.S. remains the top single-country market at roughly 20% of global Swiss watch exports. Signs of stabilization in China, the other pillar market that had been struggling, suggest both major demand centers are finding footing simultaneously.

The strategic focus coming out of this episode should prioritize investment-grade Swiss brands like Rolex, Patek Philippe, Vacheron Constantin, and Audemars Piguet that benefit most directly from tariff certainty and U.S. market stability.

Independent brands with less U.S. exposure or those based outside Switzerland faced less tariff risk to begin with, which means they benefit less from the resolution.

For collectors building portfolios designed to appreciate over five to ten years, the brands with the deepest U.S. market penetration and the most established collector bases are the ones where tariff relief translates most directly into protected values and renewed confidence that drives both retail and secondary market performance.