Watches in the Crosshairs
Trump’s trade war wasn’t aimed at horology, but the damage is ticking louder by the day.
Seal of U.S. Customs and Border Protection
In early April 2025, the Trump administration reignited trade tensions with a sweeping new tariff regime. A baseline 10% import duty was imposed on most goods entering the United States, with additional “reciprocal tariffs” of 31 percent on Swiss-made products and 24 percent on Japanese goods proposed. Although those higher rates are currently paused for 90 days pending ‘review’, the mere announcement has already shaken markets and cast a long shadow over several industries.
Few sectors are as globally interconnected as watchmaking, and even fewer are more exposed to such sudden trade shifts. The United States accounts for up to 25 percent of global luxury watch sales, making it the single largest national market in the world. In this context, “luxury” refers broadly to watches priced above £1,000, a threshold that includes most Swiss-made timepieces and the majority of mechanical watches sold by specialist brands. When American demand falters, the tremors are felt in Switzerland, France, the UK, Japan and far beyond.
Investors took notice. Since the tariffs were announced), shares of the world’s major watch groups have slid sharply (data from April 2nd - 7th, 2025):
Swatch Group (Switzerland; Omega, Longines, Tissot) has declined approximately 15.6%
Richemont (Switzerland; Cartier, IWC, Jaeger-LeCoultre) has fallen 12.4%
LVMH (France; TAG Heuer, Hublot, Zenith) is down by 13.4%
These losses are substantially worse than the broader global equity markets, with the MSCI World Index down 5.9% over the same period. The scale of the response reflects a hard truth: luxury watchmakers are acutely vulnerable to U.S. trade policy, and far more reliant on American spending than many consumers realise. While share prices reveal the stress on public companies, the pressure extends further. Rolex, the most recognisable name in luxury watchmaking, is privately held by the Hans Wilsdorf Foundation and does not publish earnings or financial guidance. Yet with a deeply entrenched U.S. retail network and a fully Swiss manufacturing base, it is almost certainly feeling the same effects. The consequences may be invisible, but they are unlikely to be any less significant.
Who Really Makes What: The Global Movement Ecosystem
Behind the dial of most mechanical watches lies a component more consequential than many realise: the movement. This intricate mechanism determines not only how the timepiece functions, but also, under U.S. customs law, how it is taxed.
Movements are typically supplied as ébauches: base mechanical calibres sold unfinished, then customised by brands. These may receive decorative finishes, functional modules or engraved rotors. However, unless a brand re-engineers the movement at a fundamental mechanical level (which is extremely rare) the country of origin remains that of the base movement. Under U.S. trade rules, this origin alone defines the watch’s classification and import duty.
Many companies label these movements with internal calibre numbers or market them as “proprietary,” even “in-house.” In truth, most are standard ébauches with cosmetic alterations or bolt-on modules. A Sellita movement with a date complication or custom engraving remains a Sellita in the eyes of U.S. customs, and is taxed accordingly. In practice, if a brand does re-engineer a movement significantly, it is usually more commercially viable to design one from scratch or commission a bespoke calibre from a specialist. That is why the vast majority of mechanical watches, regardless of branding, rely on a small number of global movement suppliers.
Timex wears the stars and stripes — but what ticks beneath?
Swiss Manufacturers
Sellita: used by Oris, Christopher Ward, Bell & Ross, TAG Heuer, Baume & Mercier.
ETA (Swatch Group): found in Tissot, Longines, Hamilton, Mido, Rado, Breitling.
Japanese Manufacturers
Miyota (Citizen Group): used in Citizen as well as Bulova, Timex and many global micro-brands.
Seiko Instruments (SII / TMI): used in Seiko as well as Invicta, Lorus, Pulsar.
Chinese Manufacturers
Seagull: found in various entry-level mechanical watches.
Hangzhou: commonly used in skeletonised or tourbillon-style models.
These suppliers collectively account for an estimated 70-80% of all mechanical movements globally. They power everything from £150 field watches to mid-tier Swiss chronographs. Their widespread use means most brands, including those in the U.S. are fully reliant on imported movements.
For American brands, this presents a particular challenge. With no large-scale domestic movement production, nearly all rely on imported ébauches. These movements incur import duties when they enter the U.S. regardless of whether the rest of the watch is assembled, cased, or finished domestically. While the final product may be “Made in America” by most definitions, the tax burden is determined solely by the origin of its movement.
Only a few brands, such as Rolex, Omega, Patek Philippe, Grand Seiko and Audemars Piguet produce their movements entirely in-house. For the rest of the industry, and especially for emerging brands, the new tariff regime does more than raise costs; it exposes a fundamental mismatch between the realities of modern watchmaking and the rigid enforcement of customs law. When import duty is based on the origin of one component alone, it penalises not only global collaboration, but innovation and brand identity as well.
Origin vs. Point of Sale: How Tariffs Are Actually Applied
Here's How! - 1908 cartoon about Tariffs by J Keppler Jr
As previously explained, a watch’s official country of origin under U.S. law is determined by the movement it contains; not where the case is made, the watch is assembled or the brand is based. This creates a sharp disconnect between consumer understanding and customs enforcement.
In practice:
A British designed watch using a Swiss movement is taxed as Swiss;
A U.S. assembled watch powered by a Japanese Miyota calibre is taxed as Japanese;
A micro-brand using Chinese movements or components may face combined tariffs of up to 145%, due to Section 301 penalties on Chinese goods.
The situation becomes even more complicated for brands operating across multiple borders. Take Christopher Ward as an example: the brand imports Swiss movements into the UK, where it designs, assembles and quality-controls its watches. Despite this domestic value-add, when those watches are exported to the U.S., they are taxed as Swiss imports, simply because of the movement’s origin.
It’s a clear case of double taxation. The company pays duties on the components when they enter the UK, contributes domestic labour and infrastructure, then faces full Swiss tariffs when exporting the final product to the U.S.
This policy doesn’t reward national branding, job creation or assembly location. A watch made in Britain using a foreign movement is taxed identically to one made entirely overseas. For companies that cannot manufacture movements in-house (the overwhelming majority) there’s no realistic way to avoid these costs.
The outcome is a tariff structure that feels entirely disconnected from how modern watches are made. It punishes global supply chains, imposes additional burdens on the most agile brands and makes it harder for independent watchmakers to expand into key markets like the U.S.
The Hidden Casualty: Collateral Damage for U.S. Watchmaking
Although these tariffs were not designed with watchmaking in mind, their broader aim was clear: to promote American manufacturing, reduce dependence on foreign suppliers and rebuild domestic industrial capacity.
But in the watch sector, one of the most globally intertwined industries, the effect may be quite the opposite. American brands like Timex, Vaer, Nodus, Martenero and Astor+Banks rely on proven ébauches from Miyota, Seiko Instruments and Sellita. These movements are reliable, cost-effective and widely respected, but they expose U.S. brands to these import duties even when much of the value is added domestically. A policy intended to boost U.S. manufacturing may ultimately penalise the very companies trying to contribute to it, not because they refuse to reshore, but because the infrastructure to do so barely exists.
At the top of the market, brands like Rolex or Omega may be hit by tariffs, but they can lean on global prestige, pricing power and established customer demand. Their buyers may grumble at a 25–30% increase, but many will still pay.
Microbrands and small U.S. watchmakers don’t have that luxury. Their business models depend on accessible pricing and global supply chain efficiency. Many operate in the $300–$800 range, using Japanese or Swiss ébauches and overseas components. If tariffs sharply raise those costs, these brands may not adapt, they may vanish.
And if the long-term intention is to revive American watch manufacturing, the barriers are significant:
Specialised machinery is not made in the U.S., CNC mills, gear hobbing machines and jewel-setting rigs are nearly all produced in Switzerland, Germany, Japan or China. All would be subject to tariffs upon import.
Skilled labour is scarce. The U.S. has relatively few trained watchmakers. Only boutique firms like RGM in Pennsylvania operate at a near in-house movement level and even they depend on imported parts.
The economics still don’t work. It remains cheaper to import a heavily taxed Swiss ébauche than to build one domestically from scratch, especially with high labour costs and tariffed tooling.
It’s a paradox: a tariff system that raises costs while making the solution, domestic production, even more expensive to achieve. This doesn’t just threaten margins. It threatens the long-term viability of American watchmaking. Without serious policy refinement or targeted support, the brands most aligned with the goals of U.S. manufacturing may become its first casualties.
Cased in America by Star Watch Case Company, Le Coultre Memovox case back
Lessons from the Past: How Casing Once Saved American Watchmaking
If U.S. policymakers come to recognise just how dependent domestic watchmaking is on imported ébauches, it’s not difficult to imagine a targeted policy response — specifically, the introduction of reduced tariffs on uncased movements.
Such a measure would reflect the current structure of the industry. American watch brands do not produce movements at scale, and realistically, they are unlikely to reach that point any time soon. Most lack the capital, equipment and skilled workforce to develop in-house movement manufacturing. And without immediate structural support, they may not survive long enough to even try. Before any training programmes, facility investments or reshoring efforts could materialise, these brands would already be absorbing higher duties on their most essential components. With margins already thin, many would be forced to scale back or close before building anything new.
Offering tariff relief on this single but critical component could allow these brands to remain viable, while also encouraging local job creation in assembly, regulation, servicing and design.
This kind of policy would not benefit the major luxury manufacturers. Brands like Rolex, Omega and Patek Philippe are vertically integrated and unlikely to fragment their supply chains for the sake of tariff savings. Their commitment to quality control and global brand consistency means they are more inclined to pass on tariff costs to consumers than decentralise production. For smaller American watchmakers and independent brands, however, a lower duty on uncased ébauches could be transformative, just as it once was.
In the mid-20th century, Swiss watchmakers found a legal and effective workaround to high U.S. import duties on fully assembled watches. Instead of exporting complete products, they shipped uncased movements to the United States, where casing and final assembly were carried out domestically.
This was driven by cost. At the time, a complete Swiss watch could be taxed at ad valorem rates of up to 50 percent of its declared value. Uncased movements, however, faced much lower duties: $1.25 for a standard 17-jewel calibre, or $3.00 plus 25 percent of the declared value for those with more jewels. U.S. made cases were not taxed on import, and even foreign cases attracted lower rates than complete watches.
As a result, brands like Omega, Longines and Jaeger-LeCoultre routinely exported only the movement and completed the watches in the United States. This practice helped create a modest but notable American casing industry. Firms such as the Illinois Watch Case Co., Star Watch Case Co. and Wadsworth provided jobs, supported local economies and made Swiss mechanical watches more affordable for American consumers. By avoiding the steepest duties, watches assembled in the U.S. could be offered at significantly lower prices than their fully imported counterparts.
Still, there were compromises. Because casing was handled outside the manufacturers’ own facilities, often by third-party firms, differences in fit and finish emerged. Although the movements were Swiss, inconsistencies in water resistance, dial alignment, engraving and machining meant that watches cased in the U.S. did not always match the quality of those produced entirely in Switzerland. Today, these differences are recognised by collectors. Vintage U.S. cased models are often valued less highly than those assembled in-house in Europe.
Eventually, the economic advantage disappeared. By the late 1960s, the lower tariff rates on uncased movements were withdrawn. Without the cost incentive, the American casing industry faded. Today, U.S. customs still classifies watches according to the country of origin of the movement, but there is no longer any reduced duty for importing it separately. Whether a watch arrives fully assembled or is put together locally, the tariff is the same.
Although not currently part of the policy conversation, reintroducing lower tariffs on uncased movements could once again be a practical way to support American watchmakers. It would recognise the reality that while the U.S. does not manufacture its own movements, many of its watch brands are actively engaged in domestic production processes. A differentiated tariff structure would reward those efforts without offering windfalls to the larger, vertically integrated firms overseas.
Such a move would not solve every issue facing the industry. However, it would acknowledge the limitations of the current supply chain while providing a targeted and historically informed way to stimulate local activity. In a climate increasingly defined by industrial policy and protectionism, this may be one of the few realistic paths forward for the revival of American watchmaking.
The Vintage Escape: Rising Demand, Fixed Supply
As tariffs push up the cost of new imports, the secondary market is beginning to look like the most rational alternative. Buyers priced out of modern models, or simply unwilling to pay a premium for watches caught in geopolitical crossfire, are turning their attention to vintage and pre-owned pieces with renewed interest.
Watches already in the U.S. remain unaffected by the new import duties. That includes everything from mid-century classics to pre-owned versions of current references like the Submariner, Speedmaster or Santos. For collectors and newcomers alike, the appeal is simple: stable prices, immediate availability and no customs complications.
But while demand may grow, supply is not so easily replaced. The inventory of vintage and pre-owned pieces already within the U.S. is finite and replenishing it from abroad is no longer straightforward. Importing a vintage watch from overseas still carries the same duties as a new one, based on the origin of the movement. That limits the ability of U.S. buyers to arbitrage international markets.
Yet price is perception. As U.S. vintage prices rise due to constrained supply, dealers in the UK, Europe and elsewhere may adjust their own pricing, not because they expect a flood of American customers, but because their stock begins to look undervalued in global terms. Pricing tends to balance itself internationally, even when trade barriers stand in the way. The result may be slower, but broader: a steady lift in vintage prices worldwide, driven not by cross-border sales, but by comparative pricing and market psychology.
In a climate of rising new watch prices and unpredictable trade conditions, the pre-owned and vintage market offers more than nostalgia, it offers insulation. And increasingly, it may offer scarcity too.
Conclusion: Tariffs, Timekeepers, and the Cost of Misalignment
What began as a broad attempt to realign U.S. trade policy is now sending shockwaves through one of the world’s most intricate and internationalised industries. Watches may seem peripheral to global politics, but their supply chains tell a deeper story, one of dependency, integration and unintended consequence.
This tariff regime, though not aimed at horology, has exposed a structural truth: the industry’s global nature does not sit easily within nationalist policy frameworks. Brands reliant on international ébauches and cross-border assembly are penalised. Domestic players are squeezed. Luxury groups see their shares fall. And vintage markets adjust to fill the gaps left by disrupted flows.
If there’s a lesson here, it’s that protectionism, when applied bluntly, often backfires. It risks weakening the very industries it aims to bolster, not through ideology, but through practical misalignment with how modern manufacturing works.
The effects are already unfolding. But the response from policymakers, watchmakers, and collectors alike, is still in motion.
Whether that means revisiting tariff classifications, supporting domestic assembly or accelerating vertical integration, one thing is certain: time waits for no one. And for the global watch industry, the clock is already ticking.
