Tariff imposed and Watch Prices in the USA

[Duke Nukem]

Originally Posted by Stupot

Morning,

Just curious from the American side what's happening on the ground.

Am I right in saying that's the tariffs live and in effect?

What has that resulted in at the AD's, and the website, have the prices gone up?

No changes on Rolex USA's website, yet.

[enjoythemusic]

Originally Posted by Maleg

One doesn't get $46 trillion in debt by spending wisely.

But it's been great, surely the USA loves the 'donations'. The great thing is the bagholders of massive debt are still buying. We should all be so lucky to be able to run up household / business debt to such an extent and still find buyers of additional debt

[JRell]

[QUOTE=enjoythemusic;13598478]But it's been great, surely the USA loves the 'donations'. The great thing is the bagholders of massive debt are still buying. We should all be so lucky to be able to run up household / business debt to such an extent and still find buyers of additional debt [/

Double post

[JRell]

Originally Posted by enjoythemusic

But it's been great, surely the USA loves the 'donations'. The great thing is the bagholders of massive debt are still buying. We should all be so lucky to be able to run up household / business debt to such an extent and still find buyers of additional debt

The consumer spends it, we take the hit, that’s the problem. All self-inflicted.

[Calatrava r]

Originally Posted by BraveBold

This, and already-happening impacts, is key.

Sustained tariffs (as announced) will decimate the global economy. Decimate.

However, I expect most will be substantially or entirely reduced. Question is over what time frame?

Already restructuring is happening across multiple sectors as the impact is occurring (because companies must make decisions, even in the absence of stability). So those layoffs will start showing up, impacting sentiment. Of course, there is also the real effects of the job losses themselves, particularly if the uncertainty remains.

The damage may already be done and now it’s merely a question of extent. Minor hiccup? Unclear if that remains a probable path, with the window closing further every day. Run-of-mill recession? That is roughly what markets anticipate… but that is only if resolved in weeks or a month.

Also, many do not understand how interwoven other aspects are. Bond yields are dependent on global purchasing, including significantly from those on the receiving end of tariffs. Do not for a moment think they are unaware of the leverage they have. This could significantly amplify negative effects here and the cost to offset by the Fed will be tremendous.

This is why I say so few can have an informed view on implications. It takes multi-domain expertise and you ignore one critical aspect at your own peril. Dr. Siegel has it right.

The interesting thing to me is suppose the US and China reach a tariff deal tomorrow and everyone breathes a sigh of relief (as they should) what changes? Absolutely nothing. We still import what we do from them and they from us. Overtime lessening trade barriers should alter some manufacturing trends, but real solutions are not in tariffs but in the trade deficit nation enacting laws and taxes which make it cheaper for companies to produce stuff in that country rather than import it.

[JRell]

Originally Posted by Calatrava r

The interesting thing to me is suppose the US and China reach a tariff deal tomorrow and everyone breathes a sigh of relief (as they should) what changes? Absolutely nothing. We still import what we do from them and they from us. Overtime lessening trade barriers should alter some manufacturing trends, but real solutions are not in tariffs but in the trade deficit nation enacting laws and taxes which make it cheaper for companies to produce stuff in that country rather than import it.

The real solution is not tariffs. All I needed to read here. 100% correct.

[mongrelnomoad]

Originally Posted by Calatrava r

The interesting thing to me is suppose the US and China reach a tariff deal tomorrow and everyone breathes a sigh of relief (as they should) what changes? Absolutely nothing. We still import what we do from them and they from us. Overtime lessening trade barriers should alter some manufacturing trends, but real solutions are not in tariffs but in the trade deficit nation enacting laws and taxes which make it cheaper for companies to produce stuff in that country rather than import it.

Except that this implies that there is some inherent evil in trade deficits in and of themselves, which many economists would argue there isn’t.

[Dave O]

Originally Posted by Mystro

The news hype is in overdrive to scare (what they do best) and to set up plausible price hikes by businesses if necessary or not. It’s the same Covid market scare tactics all over again. The bottomed feeder car salesman are already using their “lock your pre tariff pricing in today” advertising. It’s nauseating how frantic some can be worked up and manipulated.

What’s funny is those that went berserk that some were not sharing their same frantic concerned during the Covid years are also going bananas others are not concerned again about tariffs.

Couldn't have said it better myself. Everyone just needs to chill and give it a few months (not less than a week) to see where it all shakes out.

[BraveBold]

Originally Posted by Calatrava r

The interesting thing to me is suppose the US and China reach a tariff deal tomorrow and everyone breathes a sigh of relief (as they should) what changes? Absolutely nothing. We still import what we do from them and they from us. Overtime lessening trade barriers should alter some manufacturing trends, but real solutions are not in tariffs but in the trade deficit nation enacting laws and taxes which make it cheaper for companies to produce stuff in that country rather than import it.

There is an idealized future state that could arise from this trade war.

Lower barriers, globally. Selective protections in place (a big misstep for the US has been limited aforethought on the strategic benefit of a minimum manufacturing base outside defense). Fantastic.

You would still have trade imbalances.

That should be viewed as okay too.

But the break it to fix it approach is flawed. We will see how close to a positive outcome (of possible outcomes) we actually get. There will be blood, economically-speaking, but what riches will follow? The more protracted this stage of brinkmanship gets, the more negative (net) outcomes I anticipate.

For me a “good” outcome is for some meaningful concessions to be made and a significant walk back of tariffs. Those concessions may have some long-term benefit - but it should not be “tariffs will bring xx mfg jobs across all industries cuz foreign goods prices are now higher.” That logic will not hold as some expect.

[Devildog]

Originally Posted by GB-man

The US consumes something like half the Rolex inventory annually. China is by far the second largest market and Chinese buyers have taken their foot off the gas a few years ago for various reasons.

There’s nowhere to divert that many watches.

Tom, do you have figures to back that up?

Half seems on the high side.

Basic population stats:

USA - 340m

Europe - 744m
Japan - 124m
Russia - 143m
China - 1,400m

Even if its around half, that's circa 500k watches. If the tariffs half USA demand, that's only 250k extra watches for the rest of the world.

There are approximately 58 million millionaires globally, 2/3 of which are based outside the USA.

The rest of the world would swallow those extra 250k Rolex watches annually without a blink of the eye.

[garyk]

Originally Posted by alphadweller

Meh, money for Rolex, money for US tariff. One can hope the US government will spend it wisely.

Hahaha . No chance…

[Stupot]

Originally Posted by Duke Nukem

No changes on Rolex USA's website, yet.

Interesting.

Wonder if they have decided to absorb it between Rolex and the AD, or if they are just going to sell through stock already in before the tariff took hold?

Curious how this develops.

[Calatrava r]

Originally Posted by mongrelnomoad

Except that this implies that there is some inherent evil in trade deficits in and of themselves, which many economists would argue there isn’t.

Exactly right. A growing country with a large population will need to import far more than small country with a level economy. I don't even think tariffs are all that much of a concern either. They are ultimately governed and contained by what a population can pay and how they can obtain needed goods elsewhere or internally. In the long run high tariffs exist in places where they do not much matter as that country has access to goods from somewhere which are affordable to its people.

[GB-man]

Originally Posted by Devildog

Tom, do you have figures to back that up?

Half seems on the high side.

Basic population stats:

USA - 340m

Europe - 744m
Japan - 124m
Russia - 143m
China - 1,400m

Even if its around half, that's circa 500k watches. If the tariffs half USA demand, that's only 250k extra watches for the rest of the world.

There are approximately 58 million millionaires globally, 2/3 of which are based outside the USA.

The rest of the world would swallow those extra 250k Rolex watches annually without a blink of the eye.

I do not and honestly not sure it’s public information. It’s just a figure that’s been repeated here and elsewhere mostly based on educated speculation I’m guessing.

Regardless, I’m not so sure they could easily send the entire US supply elsewhere particularly when it would be happening during a global financial meltdown.

[Mr Ben]

Originally Posted by Stupot

Interesting.

Wonder if they have decided to absorb it between Rolex and the AD, or if they are just going to sell through stock already in before the tariff took hold?

Curious how this develops.

I give up - I feel the need to vent.

Stock sold today was imported pre-tariffs.

MB&F, Christopher Ward etc have already said they’ll just pass the charge on to the consumer. This makes sense - If any country increases sales tax, the price of watches goes up. If any country increases import tariffs the price of watches goes up. It’s not rocket science.

The point of tariffs is to discourage people buying imported goods and buy from domestic manufacturers instead. Some people are getting confused thinking it means Rolex should move manufacturing to the US rather than thinking US people are being encouraged to just buy US goods.

There I’ve said it. It feels better.

[mannyv11]

in other news we are now up to 104 percent tariff on china, and 84 percent back at us.
Realistically this is going to hurt a lot of industries including a lot of farmers that export unless they get subsidized

[DoricSpiker]

Originally Posted by GB-man

I do not and honestly not sure it’s public information. It’s just a figure that’s been repeated here and elsewhere mostly based on educated speculation I’m guessing.

Regardless, I’m not so sure they could easily send the entire US supply elsewhere particularly when it would be happening during a global financial meltdown.

Half doesn't sound correct, i have heard 20% which feels more like it. Europe alone would buy those watches.

[Paraflex]

I don’t know if it has already been discussed here but apparently Rolex, AP and Breitling have decided to suspend theirs exportations to the US for the moment.

[JasoninDenver]

Originally Posted by Mr Ben

Thank you - this was cryptic enough I looked it up and it just sent me down a very entertaining wormhole of reading for half an hour!

Astonishing.

I could not make up anything more bizarre.

[BraveBold]

Something many seem to not understand is that prices of US produced goods will also rise.

If your competitors all increase their prices, what will you do? Not necessarily increase to match but you will likely increase as well, since most cannot instantly ramp production to meet unexpected demand in the near-term.

Over the longer term, in theory, prices will rise less quickly on those domestically produced goods (as domestic supply rises) but that is the longer term. After a major economic decline due to stagflation / recession.

[mannyv11]

Originally Posted by BraveBold

Something many seem to not understand is that prices of US produced goods will also rise.

If your competitors all increase their prices, what will you do? Not necessarily increase to match but you will likely increase as well, since most cannot instantly ramp production to meet unexpected demand in the near-term.

Over the longer term, in theory, prices will rise less quickly on those domestically produced goods (as domestic supply rises) but that is the longer term. After a major economic decline due to stagflation / recession.

I agree that rising waters will raise all ships theory, but also what a lot of people fail to see is that just because something is produced in the USA doesn't mean all parts come from the US. So no matter what parts of the process will increase in cost exponentially.

[JasoninDenver]

I would happily pay more for an American made quality product. However, the reality is that not many people here in the US are able and willing to pay much higher prices for goods made by American workers who are earnings a livable US wage with benefits.

In the US, our trade representative, Ron Vara, has said repeatedly that the vast majority of manufacturing re-shored will be robotically produced to keep costs down.

I wonder if you put a 65” US made t.v. (Not that any exist) at $4,000 next to a Korean or Chinese unit at $2,000 how many average Americans would pick the former. If added tariffs make the imported model the same price, which is the stated goal, then the average American simply wont buy any t.v.. After the downstream effect, our GDP decreases.

We made the decision decades ago to shift to a consumer, service-based,
intellectual property economy. While I wholeheartedly agree we have taken that too far in certain vital areas, the fact that this shift also correlates with some of the highest GDP growth is our history speaks volumes.

[BraveBold]

Originally Posted by mannyv11

I agree that rising waters will raise all ships theory, but also what a lot of people fail to see is that just because something is produced in the USA doesn't mean all parts come from the US. So no matter what parts of the process will increase in cost exponentially.

It will be dramatic and destructive.

[mannyv11]

Originally Posted by BraveBold

It will be dramatic and destructive.

agreed, a lot of smaller shops who can't absorb any tariff cost will be closing sooner than later.

A lot of people will tighten the pocketbook as they should since essentials to survive are going to go way up.

Hello 2025 recession completely self inflicted

[ajw45]

Originally Posted by mannyv11

in other news we are now up to 104 percent tariff on china, and 84 percent back at us.
Realistically this is going to hurt a lot of industries including a lot of farmers that export unless they get subsidized

That's what happened during Trunp's tariffs during the first term, the additional revenue collected almost entirely went to farm subsidies to counter the impact of reciprocal tariffs. Incompetence paid for by small businesses like mine.

[alllexandru]

State of affairs as of now

[ajw45]

Originally Posted by JasoninDenver

I would happily pay more for an American made quality product. However, the reality is that not many people here in the US are able and willing to pay much higher prices for goods made by American workers who are earnings a livable US wage with benefits.

In the US, our trade representative, Ron Vara, has said repeatedly that the vast majority of manufacturing re-shored will be robotically produced to keep costs down.

I wonder if you put a 65” US made t.v. (Not that any exist) at $4,000 next to a Korean or Chinese unit at $2,000 how many average Americans would pick the former. If added tariffs make the imported model the same price, which is the stated goal, then the average American simply wont buy any t.v.. After the downstream effect, our GDP decreases.

We made the decision decades ago to shift to a consumer, service-based,
intellectual property economy. While I wholeheartedly agree we have taken that too far in certain vital areas, the fact that this shift also correlates with some of the highest GDP growth is our history speaks volumes.

Yes. I worked for a brand that launched a made in the USA t shirt because customers demanded it. It cost 3x the imported t shirt that was basically the same, slightly thicker material. No one bought the more expensive t shirt. People love to talk about buying American but not enough put their money where there mouth is to make a successful business. Frankly, the work ethic and efficiencies seen in other cultures puts America to shame, even if wages were the same which they aren't. Tariffs won't make America more competitive, investment will.

[GB-man]

Originally Posted by Paraflex

I don’t know if it has already been discussed here but apparently Rolex, AP and Breitling have decided to suspend theirs exportations to the US for the moment.

You may be correct. I think it is very clear that they sell more watches in the US than any other market and that china is second. I would not be surprised if the US market share had been increasing the past 3-4 years given our economy had been outpacing the rest post covid. Until now of course.

This still points to a very large amount of your supply chain disrupted. While anecdotally every AD in Europe would love double the supply and more I question how it would actually pan out during a time of economic uncertainty.

[fflump]

Originally Posted by Calatrava r

What I am trying to understand is how tariffs can fix the trade imbalance problem, if it is one, with China. The problem is we import too much and want a lot more manufactured in the US. We all get that, and it is a laudable goal. The way to accomplish that is to incentivize businesses to relocate their manufacturing facilities in the US through tax incentives and the like. This at best is a gradual process. All tariffs do to the importing country in the short term is raise the cost of goods to its citizens, but the goods are still made overseas. Tariffs cannot alter that reality in the short term or even medium term. Incentivizing manufacturing to return to the US does what you want with no impact on prices. I must be missing something.

Many sectors where the US has a deficit are in areas that a high skill high wage economy “should” have little interest in bringing in-house. I’m not sure the answer to the US economic problems is by becoming a leading manufacturer of cheap t-shirts and trainers and cheap electrical goods paying minimum wage to factory workers but that is the sort of deficit which exists between US and far east countries.

[ajw45]

1. China, EU, whoever only has a trade war with the US, the US is creating a trade war with EVERYBODY. Maybe a bully can has an advantage in a 1:1 or 1:2 situation but they can't pick a fight with the whole class at the same time. The idea that this economy is weak or that economy has more to lose works in isolation but in aggregate tariffing all countries at the same time puts the US at a huge disadvantage.

2. Trade is complicated. As mentioned above, there are non trade retaliatory steps that can fundamentally break the system like the impact on treasuries. We haven't even seen the systems that will begin to stress or get broken.

3. To those saying just give it a few weeks, that's nonsense. Supply chains are continuously moving, Walmart doesn't have warehouse they just have trucks and boats in continuous motion. Price impacts will be quick and once those supply chains break down job losses will follow as we've already seen with some of the auto mnfrs and those don't come back online quickly.

One thing the administration doesn't seem to comprehend is how much this is costing. Weeks, months of disruption is a massive cost on a global scale. Trillions of cost to make a couple hundred billion in tariffs.