JoshTheCanadian
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As others have said…
This analysis is correct as to the product-specific tariff. Fortunately, watches under the harmonized tariff regime have experienced relatively low tariffs (try, in contrast, importing fabric!).
Now, however, we have a country specific tariff that will be assessed against the declared value of the good. This plays out in a few different ways.
For independents, which sell direct to consumer, you will be paying 39% of the retail price in country-specific tariffs. Yowza! Some may seek to try to game the system… do so at your own peril. I’d prefer not to be on the hook for felony customs fraud! In all seriousness, I’d really urge people not to play the “send papers in one envelope and send the watch in another.” This can lead to jail time when you are talking about defrauding the US out of real money.
A brand like Patek is interesting. Patek imports watches through HSNY, then distributes the watches to ADs, which in turn sell the watches at retail. The tariff will be assessed on the imported value of the watch. I imagine that HSNY takes a cut for its operations and all that. So, for a $50,000 watch at MSRP, the imported value may be somewhere in the realm of $20,000, so a country-specific tariff of around $7,800 would apply to that $50,000 watch. Then, HSNY sells that watch to the AD for $30,000, and pays taxes on its revenue. This is why prices went up by 15% in the US. This is probably what Patek needs to keep its profit, and it is using its market position to extract concessions from ADs.
Quick Education: USA Tariff 2025 on Swiss Watches Introductory Course 101
Many of our members have formulated some incorrect assumptions about tariffs. This short article is designed to help clear up some of the misconceptions and incorrect assumptions. Many people assume that a 39% tariff that the USA is leveraging on all Swis...
I think you're missing half the story
Duties are assessed at a category (e g. Watches) and a country level. The part you listed is at the category level, any watch. On top of that there as a country level tariff on the declared value (cost, wholesale or retail) so the effective rate is actual...
Correct, there is no such decomposition for the new tarrifs which are additive.
If I buy a watch from overseas with Swiss movement it is considered a Swiss product and I have to pay 39% of the declared value in addition to the existing charges. Retailers, distributors etc have to do the same. The value of the import would be of cours...
So the part I missed is on top.
So if we use the 5 k watch declared import value $2500 put the country level 39% we get an additional $975. As I noted I still have not seen the actual numbers. Your statement makes sense.
Unfortunately this wholesale price effect is irrelevant to individual collectors.
If I buy from an independent watchmaker, at auction or pre owned outside of the US I have to pay the additional 39% on the full price. Which pretty much kills all such transactions on the spot.
But Wait, There’s More! because states, like California, impose a USE TAX if you buy the watch out of country or state (separate from Tariffs)
If you get your watch via a dealer outside your own state (or county) you may not have to pay any sales tax (let’s take Oregon for example) at the point of sale. But California expects you to pay the tax you would owe if you bought it at home. If your Cal...
more wine please 😂
and yet every Rolex AD in CA I go to has no watches to sell to me. Shows how many rich people we have here 🤣🤣🤣
Hold up your glass please
Bonus points if you can identify the wine Mike Forget it, I can’t spell or pronounce it (but it was good) Spanish rose wine ...
I did all my European watch transactions last year.
Strong Dollar plus you knew this was going to happen. He’s been blathering on about this for years
This is truly insane (worse than insane). Two weeks ago I ordered a hand made puukoo (hunting knife from Finland) from a knife maker in a small town in Finland. Shipping to the US was €50 by UPS.
A couple of days later I received a notification from UPS that I need to pay $635 in taxes and fees for the knife to be delivered in the US. I told them to return the package to the sender. I wrote the knife maker, he told me he had learned that declaring...
This too shall pass
It used to be we could visit almost any country, now we can’t. Things were looser, now they are tighter. Europe was a crazy mess of customs and border checkpoints. Now it’s not so much. We used to go to Mexico at the drop of a hat, now it’s too dangerous....
Perhaps not. For the better part of a century America has been . . .
. . . the market of choice for global producers, partly because it was once wealthy and prosperous, but also due to favorable levy treatment for imported goods. That's changing with the new administration. The current policy of reversing trade trends back...
As others have said…
This analysis is correct as to the product-specific tariff. Fortunately, watches under the harmonized tariff regime have experienced relatively low tariffs (try, in contrast, importing fabric!). Now, however, we have a country specific tariff that will be...
Quick tutorial on “Trade Imbalance”
The gal that cuts my hair and I have a 100% trade imbalance. She buys steaks from a guy in Kansas City -they have a 100% trade imbalance. That’s how the system works!
But then we lose real meaning.
One cannot treat isolated purchases as equivalent to the systematic exchange of goods and services between nations without affecting, and losing, meaning. There seems to be a conflation here of unidirectional transactions as presented in these examples, w...
Really? How about another example, more realistic.
Guatemala is friendly to the US. It exports coffee. US does not produce coffee. It is too poor to buy American goods. There is large trade imbalance, let's slap on huge tarrifs. Which reminds me of another example ... Switzerland!!! Buys tons of American ...
Just purchased a watch from overseas
I just imported a watch from Germany, and yes, I ended up paying tariffs about (25%) or so. So you will pay tariffs, be ware.