Trump’s Tariffs Just Made My Favorite Affordable Watch Brand Way More Expensive

I was in Geneva, Switzerland, attending Watches and Wonders on April 2 of this year when President Donald Trump announced a fleet of seemingly arbitrary new tariffs on a wide range of countries in his “Liberation Day” address.

Perhaps the most shocking of these new tariffs was a 31 percent tax on goods imported from Switzerland to the U.S. The new tariffs quickly became the talk of the show, as the U.S. is the largest market for Swiss watch brands by a wide margin. Several reps with whom I spoke on that day expressed extreme worry as to what these increased prices could mean for their respective brands.

The global markets crashed after the “Liberation Day” announcement, and Trump backtracked soon after by announcing a 90-day pause on the tariffs on April 9. Now, the clock has run out on that quarter-long pause, and the new Swiss tariff — which has inexplicably risen to 39 percent — officially went into effect on August 7.

So far, most brands are taking a “wait and see” approach regarding the tariff, with the hope that Trump — who recently has garnered the acronymous nickname “TACO” for “Trump Always Chickens Out” — will ultimately reverse course on the hefty new tax.

But at least one brand is already passing the new tariff cost onto its consumers. And it’s made my favorite affordable brand a hell of a lot more expensive.

Christopher Ward

A tax by any other name

As the first fully online direct-to-consumer watch brand, Christopher Ward has always done things a bit differently than other Swiss-made watch brands.

One thing about CW I’ve always appreciated — in addition to its unbeatable quality-to-cost ratio — is the brand’s unprecedented transparency. The company’s watches are priced on a 3:1 scale, with the SRP always equaling three times the production cost — a policy of which I’m sure many Swiss luxury brands aren’t big fans.

Other aspects of CW’s transparency include frequent communications from brand co-founder Mike France explaining new price increases, and the price of the online customer’s customs duties — where tariffs show up — appearing in the buyer’s cart at checkout.

As WatchPro noticed recently, and I independently confirmed via my own experiments on the CW website, Christopher Ward is now passing the full Trump tariff costs directly on to U.S. buyers. And the costs involved are eye-popping.

Christopher Ward

Before going any further, let me just give a brief rundown on how tariffs work, as there has been some confusion on the matter.

President Trump consistently states or implies that countries outside of the U.S. are responsible for paying his tariffs to the U.S. Government. This is backwards. When the U.S. levies a tariff on another country, this is a tax on the American importer of the foreign good from the tariffed country.

For example, let’s say I’m a watch dealer based in the U.S. who imports watches from Switzerland for $1,000 each. And let’s say that, like Christopher Ward, I mark those watches up by three times what I pay for them. That means I sell these watches at $3,000 each and make a profit that’s 200 percent above cost.

Now, along comes a 39 percent tariff. Suddenly, my cost to import those watches has increased from $1,000 to $1,390 each. In order to maintain my profits at 200 percent above cost, I’ll be charging $4,170 per watch — an increase of $1,170, or 39 percent.

Christopher Ward

To illustrate what this looks like on some real watches, I played around on CW’s website. The Bel Canto with a Fine Leather Strap retails for $3,895, making the flagship chiming watch one of the pricier pieces offered by Ward, but it’s still very affordable for what you’re getting. After entering my address and proceeding through checkout, you’ll see a customs duty charge of $1,754.84, which, along with the Connecticut sales tax of $247.33, brings the new total to $5,897.17 — nearly $6,000.

OK, let’s try it with a dive watch. How about the classic Trident Pro 300? It’s a mere $1,095 on a bracelet — a crazy bargain. We have our CT tax of $69.53 and a customs duty of … $529.28, for a total price of $1,693.81. Decidedly less of a bargain.

Now, you may have noticed that those tariff prices are even higher than 39 percent. That’s because there were already customs duties in place on Christopher Ward’s watches, to the tune of around 9 percent, making the total effective tariff rate now about 48 percent.

Christopher Ward

Will other brands follow suit?

Christopher Ward is a direct-to-consumer brand, which means you, the customer, are the importer and thus are fully responsible for paying the full cost of Trump’s new tax. It also means you’re paying the tariff on the full retail cost of the watch, since that’s the price at which you’re importing.

Most brands sell watches in the U.S. through dealer networks, meaning the dealer will pay the tariff on the wholesale price of the watch. This means the upcoming price increases from other brands — which, make no mistake, are coming if this 39-percent tariff remains in place — may not be as extreme as what we’re seeing from CW.

But they also won’t be as transparent. Right now, the big Swiss watch brands are likely in the middle of difficult conversations with their retail partners about how they’re going to distribute the costs of these new tariffs and how they should adjust the prices of their watches.

Breitling

When these adjustments occur (which may not be for a few months in some cases, as certain brands, like Breitling, sent several extra months’ worth of stock to the U.S. in anticipation of the tariffs going into effect), they’ll probably be in the form of significant SRP increases, as the tariff will have already been paid by the importer, who will then pass that cost on to the customer.

Tariffs aren’t the only problem

While tariffs are the most immediate threat to your wallet when it comes to purchasing watches made in Switzerland and elsewhere, it isn’t the only one.

In an email to subscribers earlier this month, French brand Yema announced it would be raising its prices in the U.S. by 12 percent to account for the sharp decline in the value of the U.S. dollar. Compared to the beginning of this year, the dollar has lost 11 percent of its value against other currencies, its largest decline in 50 years. (Additionally, Yema announced it would raise the price of its sole Swiss-made watch, the Superman Heritage, by 39 percent).

Yema

This steep decline is a byproduct of President Trump’s tariffs, along with increased unemployment, the hedging of U.S. investments by foreign investors, and the uncertainty generated by the Trump administration’s economic policies, according to Morgan Stanley. And it’s only going to get worse, with Morgan Stanley Research predicting the dollar could lose another 10 percent of its value by the end of next year.

The bottom line is this: Trump’s tariffs and economic policies just made it a whole lot more expensive to buy Swiss watches. And unless Switzerland is able to work out a miracle new trade deal with the president, it seems like the problem could continue to get worse before it gets better.

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