Tariff imposed and Watch Prices in the USA

[Michigan_State]

Originally Posted by fflump

The reciprocal tariffs argument is bogus. Trump calculated this “tariff” based on the US trade deficit with that country! So he claims eg China levy 64% on US goods which is totally fictional

Correct. Goods only, as I understand, so excluding services (which is where the US typically generates a surplus).

[Dhiren]

https://www.hodinkee.com/articles/sw...-tariff-threat


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[askdanny]

Just have Rolex UK send us all the watches.

—Danny

[SS Oyster]

Just looked and a Submariner date is still $10,400


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[askdanny]

Originally Posted by Ferrari308

The US is only doing reciprocal tariffs. This means that if any country is charging tariffs on our goods (which is almost anything & everything that we export), then we will apply the same tariffs on goods from that country.

It's not reciprocal when the formula is based on trade deficit, not actual tariffs.

I wonder what Switzerland is supposed to do when 99% of U.S. goods already enter Switzerland duty-free. Now they're being charged 31% in tariffs. I guess stop making products that Americans want to buy?

—Danny

[gamingdoctor]

In all honesty I think Rolex is going to be OK. They have been raising prices for a while and it doesn't seem to stop most people. A tariff is not going to stop *most* people who get their watch after a X year wait.

The other less in demand watch brands might have more to worry about.

[Paddydog52]

Are these tariffs going to impact the UK and Europe? Will buyers there be paying a premium from AD’s?

[Paddydog52]

Originally Posted by SS Oyster

Just looked and a Submariner date is still $10,400


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Countries still have until 9th April to see if they can negotiate a lower tariff I believe so check after then and prices may well be higher

[BraveBold]

Originally Posted by gamingdoctor

In all honesty I think Rolex is going to be OK. They have been raising prices for a while and it doesn't seem to stop most people. A tariff is not going to stop *most* people who get their watch after a X year wait.

The other less in demand watch brands might have more to worry about.

It will be interesting to see how a (for example) 10% price increase (31% x wholesale x 50% retailer absorption, divided by retail for a DJ) influences decisions.

For many Rolexes (those with short or no waits), a buyer may consider the likelihood of the tariff being rescinded.

So, $1k on a $9-$10k watch that you can potentially save by deferring your purchase.

Hmmm, almost as though this same logic will apply across many higher price / durable and luxury purchases.

I don’t think most people fully comprehend implications.

[Krash]

Originally Posted by gamingdoctor

In all honesty I think Rolex is going to be OK. They have been raising prices for a while and it doesn't seem to stop most people. A tariff is not going to stop *most* people who get their watch after a X year wait.

The other less in demand watch brands might have more to worry about.

I agree with all of this.


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[Calatrava r]

Originally Posted by Tools

Rolex watches were already subject to a tariff, they were not coming into the country for free. Even if you bought one out of country, when you bring it in you have to pay Duty/tariff fees.

31%, if it actually sticks, is just a few percentage points above where they were already at, so to be competitive a company can reduce their "profit" by a couple of percent, as well as the retailer, and costs remain the same to the end user.

To think that tariffs are new is fear mongering, everybody everywhere pays a fee/duty/tax on goodss they import into a country.

All that has been said is that Switzerland charges an average of 61% tariff for US imports into Switzerland, so the US will impose 31% on Swiss imports unless there can be a reciprocal trade agreement made that is more balanced..

The Grey Market will not be more attractive, they would pay any tariff as well. If anything, rising prices will make the AD more attractive with increased inventory and prices lower than the Grey Market currently sells for.

I would be curious to know the existing tariff rate. If 31% is a just a few percentage points over the current rate the concern is much ado about nothing.

[kkqd1337]

As far as I know Rolex (and other brands) keep their global prices the same across different regions/markets.

I think they will just calculate their total 'tariff burden' across all their markets and spread the expense around the world with price increase everywhere.

* i say 'just calculate' but this will be a very complex accounting calculation

[Alpino]

.


Here's what could be new Rolex MSRP if Rolex USA applies directly a 31% increase :

[Calatrava r]

Originally Posted by Alpino

.


Here's what could be new Rolex MSRP if Rolex USA applies directly a 31% increase :

Remember the tariff is assessed against the import value not retail value so the amount taxed is around 50 to 60 percent of retail. If the assessment is all new and additional it figures out to be about 20 percent of current retail. What needs to be determined is how much of the 31% is already being assessed and what the "net" increase will be.

[Alpino]

Originally Posted by Calatrava r

Remember the tariff is assessed against the import value not retail value so the amount taxed is around 50 to 60 percent of retail. If the assessment is all new and additional it figures out to be about 20 percent of current retail. What needs to be determined is how much of the 31% is already being assessed and what the "net" increase will be.

Rolex MRSP are expressed without taxes in the US , contrarily to most other countries worldwide.

[BraveBold]

Originally Posted by Calatrava r

Remember the tariff is assessed against the import value not retail value so the amount taxed is around 50 to 60 percent of retail. If the assessment is all new and additional it figures out to be about 20 percent of current retail. What needs to be determined is how much of the 31% is already being assessed and what the "net" increase will be.

There is minimal assessed today. It will be a massive increase.

You are correct. Not assessed on retail but rather wholesale (as I covered above).

[Calatrava r]

Originally Posted by BraveBold

There is minimal assessed today. It will be a massive increase.

You are correct. Not assessed on retail but rather wholesale (as I covered above).

As I believe you stated, Rolex should try to equalize the prices worldwide which is their practice to prevent various markets gaining an unfair edge over others so the ultimate impact will be mitigated by the worldwide dispersion of the price increases.

[Tools]

In the early 1900's the US Congress passed the 16th amendment that allowed them to levy previously unconstitutional taxes on income.

Income taxes have skyrocketed as the income from tariffs was reduced to encourage trade with other countries.

Since then, tariffs have become lopsided against the US and income taxes have gone off the charts.

Tariffs are not new and should be balanced so US workers and businesses can compete on the world stage.

[JRell]

Originally Posted by Tools

In the early 1900's the US Congress passed the 16th amendment that allowed them to levy previously unconstitutional taxes on income.

Income taxes have skyrocketed as the income from tariffs was reduced to encourage trade with other countries.

Since then, tariffs have become lopsided against the US and income taxes have gone off the charts.

Tariffs are not new and should be balanced so US workers and businesses can compete on the world stage.

Tariffs = higher prices = bad. The consumer only loses.

[fflump]

Haha much ado about nothing?
Switzerland charges zero import tariffs!

[Easy E]

Originally Posted by JRell

Tariffs = higher prices = bad. The consumer only loses.

Higher tariffs = lower taxes = good. Or so the story goes.

[JRell]

Originally Posted by fflump

Haha much ado about nothing?
Switzerland charges zero import tariffs!

It is all made up with crazy math.

[EverCloserUnion]

Originally Posted by Ferrari308

At the same time, you have to recognize that tariffs are imposed heavily on any US made products that are exported. The US has applied no tariffs on anything in the post WW2 era. So, we in the US have allowed this for nearly 80 years.

The US is only doing reciprocal tariffs. This means that if any country is charging tariffs on our goods (which is almost anything & everything that we export), then we will apply the same tariffs on goods from that country.

It's intending to turn the market into a true FREE market and have the US companies have a level playing field with foreign markets.

You might notice that Canada has agreed to eliminate all tariffs with the US rather than to have to charge them. That came pretty quickly. Who is going to be next to drop their tariffs against the US? I am genuinely curious.


PDG

It's rare to see a post on this forum with so many errors.

No tariffs since the WWII? Not so. The US, like all countries, maintains a tariff schedule (typically on a MFN basis if an FTA or RTA isn't in place).

A level playing field? High tariffs do the opposite. They're intended to reduce imports by favouring the domestic producers. It's classic mercantilism (an economic philosophy that fell out of favour more than a century ago).

Canada has agreed to eliminate all tariffs? You should inform the Canadians - it'll be news to them. And no, the only news source reporting this elimination isn't credible.

And to bring this subject back on topic, on top of the Swiss tariffs on Rolex watches you'll also have the issue of dollar weakness vis-a-vis CHF.

[OG1982]

Originally Posted by Paddydog52

Are these tariffs going to impact the UK and Europe? Will buyers there be paying a premium from AD’s?

The UK is not raising tariffs on Swiss watches, so no UK buyers will pay the same as they did a month ago. Until Rolex raised prices of course.


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[JRell]

Originally Posted by EverCloserUnion

It's rare to see a post on this forum with so many errors.

No tariffs since the WWII? Not so. The US, like all countries, maintains a tariff schedule (typically on a MFN basis if an FTA or RTA isn't in place).

A level playing field? High tariffs do the opposite. They're intended to reduce imports by favouring the domestic producers. It's classic mercantilism (an economic philosophy that fell out of favour more than a century ago).

Canada has agreed to eliminate all tariffs? You should inform the Canadians - it'll be news to them. And no, the only news source reporting this elimination isn't credible.

And to bring this subject back on topic, on top of the Swiss tariffs on Rolex watches you'll also have the issue of dollar weakness vis-a-vis CHF.

Thank you. Might I add knowing the industry well that the US can’t find enough skilled labor now to fill manufacturing jobs, so even if companies started more manufacturing here, which they won’t because our cost of labor is high compared to other countries, it will take 10 years to get enough into the trades. This should be a long term goal for the US. These tariffs hurt us getting to that goal.

[SS Oyster]

Originally Posted by JRell

Nope doesn’t work that way. These tariffs only add to the US families cost of living. Average family will pay in average $2100 more a year. Why are we not listening to any financial experts?

https://www.cnn.com/

You think CNN is unbiased?!? Or are experts?!?


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[JRell]

Originally Posted by SS Oyster

You think CNN is unbiased?!? Or are experts?!?


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Oh here we go lol - where do you get your “news”? You want unbiased? Check the stock market.

[Alpino]

.

You mean it's the end of iPhone ?

[L_S_SHOE]

If the tariffs stand for an extended period, most the world will feel the pain. How this will affect demand is less clear to me, but I see it as a game of chicken. Americans will certainly feel the pain, but the rest of the world will feel it too, probably more so.

In the end, I think this is mostly bad for everyone. Even if worldwide demand goes down and availability improves, watch prices will be higher, incomes will stagnate (more than normal), and everyone’s 401k will take a hit.


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[watchnoob]

Originally Posted by Tools

Rolex watches were already subject to a tariff, they were not coming into the country for free. Even if you bought one out of country, when you bring it in you have to pay Duty/tariff fees.

31%, if it actually sticks, is just a few percentage points above where they were already at, so to be competitive a company can reduce their "profit" by a couple of percent, as well as the retailer, and costs remain the same to the end user.

To think that tariffs are new is fear mongering, everybody everywhere pays a fee/duty/tax on goodss they import into a country.

All that has been said is that Switzerland charges an average of 61% tariff for US imports into Switzerland, so the US will impose 31% on Swiss imports unless there can be a reciprocal trade agreement made that is more balanced..

The Grey Market will not be more attractive, they would pay any tariff as well. If anything, rising prices will make the AD more attractive with increased inventory and prices lower than the Grey Market currently sells for.

You too have been just spewing out the soundbites that are incorrect. For example, the 61% was calculated based on trade deficit not the percentage that CH levies on American goods. Encourage you to actually learn more about tariffs and look into the facts, rather than relying on political commentators.