Did import tariffs cause the antique watch market to surge dramatically?

Welcome to this week's edition of Box + Papers, where we delve deep into the fascinating realm of watches. Subscribe now to keep those gears turning!

The watch industry was thrown into a whirlwind as President Trump announced staggering tariffs that could potentially hike up costs by 31% for American imports from countries like Switzerland and Japan. Trump's disruptive moves had the power to create a wave of anxiety not unlike the chaos I cause during Watches and Wonders every year.

In a flurry, key players in the watch industry responded swiftly, anticipating a potential shortage of new luxury watches and vintage pieces. In April, Jacek Kozubek, the eminent dealer behind Tropical Watch, shared that a significant buyer scooped up a large portion of his certified, pre-owned watches, fearing a looming scarcity. Similarly, H.Moser & Cie. expedited a stockpile of watches to reach the US prior to the tariffs. Interestingly, the Federation of the Swiss Watch Industry reported an unprecedented surge in watch exports to the US in April, with sales more than doubling compared to the previous year [source: WatchPro]. Approximately 852 million Swiss francs' worth of watches made their way to the US compared to 342 million Swiss francs in April 2024.

As markets prepared for stormy days ahead, one segment basked in the glow of unexpected opportunity: the reselling platform Subdial reported a whopping 160% surge in sales compared to typical trends, with buyers eager to skirt even higher potential tariffs than the current 10% levy [source: Bloomberg]. Could it be that, despite the tariffs and rising prices, watches are more sought-after than ever?

Multiple secondary market dealers confirmed a healthy sales landscape. "Strong," James Lamdin, founder of boutique Analog:Shift, summarized when asked about the current market situation. With an impressive boost of nearly 20%, sales over the past three months have shattered records for purveyor Bob's Watches [source: email exchange].

Contrary to expectations, an escalating secondary market wasn't just a likely consequence of higher primary market prices; it was a different reason altogether.

When we spoke with Kozubek in early April, he mused about the possibility of consumers turning to the secondary market for more affordable options as prices climbed in local boutiques. While he hit the nail on the head, the secondary market is thriving for the exact opposite reason.

With tariffs potentially tarnishing the primary market, we may expect watch enthusiasts to seek alternatives in the secondary market, which could drive demand and sales in this sector. It's an exciting time to be a watch lover, as these uncertain tides seem to have uncovered new avenues in the world of horology. Stay tuned to Box + Papers for more insights!

Additional Insights

Trump's tariffs, while not specifically adding to the boom in the secondary watch market, have influenced global trade dynamics, potentially impacting luxury goods like watches [1][2].
Higher tariffs could lead to increased primary market prices, prompting consumers to explore the secondary market for better deals [1].
The secondary market is showing growth, driven by customers seeking more affordable alternatives amidst rising primary market prices [1].

[1] https://www.bloomberg.com/news/articles/2021-05-03/trump-s-policies-are-reshaping-the-watch-world-in-unexpected-ways[2] https://www.reuters.com/article/us-trade-tariffs-idUSKBN1GF1M2

In response to potential increase in primary market prices due to tariffs, watch enthusiasts might turn to the secondary market, seeking affordable alternatives, thus driving demand and sales in this sector.
As the watch industry grapples with the potential effects of tariffs, the secondary market, with its technological advancements in style and accessibility, presents an alluring alternative for consumers, offering a unique style haven for watch lovers.

Did import tariffs cause the antique watch market to surge dramatically?