When tariffs threaten the watch market – What the new trade barriers mean for Germany and Europe
Our blog usually focuses on design, craftsmanship, and emotions – not economic wars. However, at this historic moment, we cannot ignore the proverbial elephant in the room: With the introduction of drastic new tariffs on watches from Switzerland, Germany, and Japan by the Trump administration, a topic suddenly comes into the spotlight that usually remains behind the scenes.
The current situation – and why the excitement is high
On April 2, 2025 – right in the middle of Watches & Wonders in Geneva – the news hit the industry like a lightning bolt: The USA is imposing new tariffs of 31% on Swiss, 24% on Japanese, and 20% on European (including German) watches. Previously, import tariffs were mostly moderate at 3–8%.
After the initial market reactions, a 90-day moratorium was temporarily imposed, capping the tariffs at 10% – but the fear remains: If fully implemented, European luxury watches would become significantly more expensive in the US market.
Particularly bitter: The USA is not only the most important export market for the Swiss watch industry (16.9% of all exports) but also an increasingly important sales market for German manufacturers – as well as a central channel for the secondary market and platforms like Chrono24.
Additional costs that no one can ignore
An example illustrates the urgency: A luxury watch with a wholesale price of 10,000 US dollars previously cost around 10,600 dollars. With a full tariff rate of 20% on EU goods, it would soon cost 12,000 dollars – a price jump that would likely deter many buyers.
For Swiss watch brands like Rolex, Patek Philippe, or Audemars Piguet, a tariff rate of 31% would apply – a surcharge that is even harder to bear.
Consequences for the German watch market – a domino effect
What initially looks like an "American problem" could also have noticeable effects in Germany and Europe:
- Fewer exports: A decline in US sales directly affects German manufacturers and forces them to explore new sales markets – a challenging task.
- Jobs at risk: Especially in regions like Glashütte, where watchmaking is a central economic sector, order declines could become existentially threatening. A fate that also affects other key industries like the automotive sector – with negative consequences for employment and purchasing power.
- Fewer investments: Companies might put innovations and expansion plans on hold – a dangerous standstill in a globally fiercely competitive market.
- Collapsing secondary market: Collectors could also feel the impact, as a shrinking global market influences the availability and value of vintage and luxury watches.
The dream of "Watches Made in USA" – wishful thinking?
Supporters of the tariffs argue that this could revive US watch production. But a realistic view shows: this is difficult to implement.
Since the quartz crisis in the 1970s, the watch industry in the USA has almost disappeared. Highly specialized components like balance springs or mechanical movements are hardly manufactured there anymore.
By comparison: Switzerland requires at least 60% of the value creation to take place in the country for the designation "Swiss Made".
For a genuine "Made in USA" label, almost complete domestic production is necessary – an effort that is currently hardly realistic.
Additionally: There are only about 4,000 watchmakers in the entire USA today – fewer than the total number of professional athletes in the NBA, NFL, MLB, and NHL.
Statistically, it is more likely to encounter Stephen Curry or Jalen Hurts on the street than a watchmaker!
A global ecosystem under pressure
The luxury watch industry thrives on global trade relationships, specialized supply chains, and international demand. Tariffs endanger this finely balanced equilibrium.
For Germany – with its strongly export-oriented luxury goods industry – a sustained decline in US business would be a hard blow. The entire European market could also come under pressure, as high volumes and stable margins often depend on functioning export channels.
Conclusion: Hope rests on reason
The new tariffs on watches and other European export goods clearly show: trade barriers affect not only manufacturers but also collectors, dealers, and entire industries.
For Germany – proud of its watchmaking art and precision technology – they represent a serious threat.
The watch market – like many other areas of our globally connected economy – needs stability, open markets, and reliable framework conditions. Only in this way can craftsmanship continue to thrive – from the small workshop in Glashütte to the flagship store in New York.
In a time when the world is coming closer together than ever before, one can only hope: that reason will prevail over tariffs – and not politics slow down the fine art of timekeeping.
Image generated with the help of ChatGPT (DALL·E) from OpenAI.
