Showing posts with label Trump's Tariffs. Show all posts
Showing posts with label Trump's Tariffs. Show all posts

Thursday, April 10, 2025

If President Trump’s 31% tariffs On Switzerland Are Imposed, Then Instead Of Buying The Rolex Land-Dweller In The U.S. It Will Be Cheaper To Fly First Class From New York To Geneva, Buy The Watch, Stay In A Suite At The Four Seasons, Dine At A Michelin Restaurant And Fly Back

In a world where luxury and logic rarely coexist, a curious financial paradox is emerging in the world of fine watches. Thanks to a proposed tariff hike on Swiss watches imported into the United States, the cost of owning a brand-new Rolex Land-Dweller might skyrocket. If the tariffs are implemented as planned, prices for Swiss watches could jump by as much as 31%. That means, in theory, a watch that has a retail price of €47,400 (about $52,300) would now cost closer to $68,500 for American buyers.

This potential markup of over $16,000 is enough to make even the most brand-loyal Rolex enthusiasts take pause. But more than that, it opens the door to a fascinating and very real possibility: it could soon be cheaper to fly to Geneva in first class, stay in a luxury suite, dine at a Michelin-starred restaurant, and buy the Land-Dweller locally, all for less than what it would cost to buy the same watch stateside.

The thought reads like the beginning of a luxury heist or a well-researched finance blog hack, but it’s grounded in hard numbers. A round-trip first-class flight from New York City to Geneva with American Airlines can be booked for around $11,000.
The loft suite at the Four Seasons Geneva

Furthermore, a suite at the Four Seasons Hotel des Bergues—arguably one of the most exclusive stays in the city—can cost about $3,000 for one night. Add in a dinner at one of Geneva’s renowned Michelin-starred restaurants like Domaine de Châteauvieux or Le Chat-Botté, and you’re looking at another $1,000 for a decadent, wine-paired evening.
The Le Chat-Botté

Add all that up—flight, lodging, gourmet experience—and the total cost comes to approximately $15,000. Subtract that from the $16,000 saved by avoiding the tariff-inflated price in the US, and you’re still left with roughly $1,000 to spare. That’s $1,000 after having flown first class across the Atlantic, indulged in five-star hospitality, and walked out of a Swiss boutique with one of the most anticipated Rolex releases of the year strapped to your wrist.
Buyers queued up outside the Rolex store in Geneva.

It sounds outrageous, and yet it is a perfectly rational response to an irrational pricing distortion. Rolex’s pricing structure is famously opaque, with allocation policies and boutique politics sometimes standing in the way of even the wealthiest buyers. But at least for those who have access to the Land-Dweller at MSRP in Switzerland, this workaround not only makes financial sense—it turns the act of purchasing into an experience worthy of the brand’s prestige.
Image – The White House

To be clear, the prices have not changed yet. As of now, the U. price remains untouched, and Swiss boutiques are still selling their models at current retail rates. The scenario, then, is a thought experiment—a projection of what could happen if the US follows through on the proposed 31% tariff on Swiss timepieces. But it’s a scenario that buyers, resellers, and even rival luxury brands are watching closely.

Geneva, long regarded as the beating heart of horology, has always been a kind of pilgrimage site for watch aficionados. But in a world where trade policy warps the cost of global luxury, the Swiss city could become a strange new outpost for American retail therapy. Weekend jaunts to Switzerland may become less of a novelty and more of a calculated financial decision. For those spending five figures on a watch, it’s not absurd to tack on a European vacation—especially when it effectively costs nothing.

There’s also something undeniably poetic about it. A buyer leaving JFK, settling into a lie-flat seat, sipping champagne at altitude, arriving in the cradle of watchmaking, and walking cobbled streets to a boutique perched on the edge of Lake Geneva. They make their purchase in the place where the watch was born, sleep in a suite once occupied by diplomats and dignitaries, and dine under the artistry of chefs who plate with the same precision as a master watchmaker.

Of course, not every buyer will have the time—or inclination—to cross the Atlantic for their watch. But for those who do, this may be one of those rare instances where indulgence is not only enjoyable, but economically justified. In the strange math of luxury under tariffs, flying first class to buy a watch abroad might not be a splurge. It might just be smart shopping.

https://luxurylaunches.com/author/sayan/

Friday, April 4, 2025

Trump's Tariffs Set To Drive Up Bar Bills And Wipe Out Spirits Jobs

U.S. drinkers will pay more for cocktails, champagne and foreign beers, brands will disappear from bar menus and jobs will be lost on both sides of the Atlantic as a result of U.S. President Donald Trump's reciprocal tariffs, drinks industry bodies and analysts said on Thursday.

Trump's latest round of global and country-specific tariffs was set to hit everything from the popular negroni cocktail, based on Italy's Campari liqueur, to Guinness stout, made by the world's top spirits producer Diageo.

He also introduced a 25% levy on all beer imports and added beer cans to existing aluminium tariffs, hitting labels such as Mexican-made Corona and Dutch Heineken.

Shares of some spirits companies such as Diageo and Campari however gained as threats of 25% tariffs affecting Mexican tequila and Canadian whisky did not materialise. A threatened 200% tariff on European alcohol also remained outstanding for now.

However, industry bodies said the levies laid out on Wednesday were already high enough to hurt sectors that rely heavily on U.S. drinkers for sales.

European spirits exports alone to the U.S. stood at 2.9 billion euros ($3.18 billion) in 2024, according to trade body spiritsEurope, which said many U.S.-based jobs also relied on this trade.

French groups and officials warned of a 20% slide in sales and mass layoffs in regions like Cognac, where French brandy is produced for export, largely to the U.S. and China. The Spanish Wine Association warned no market could offset lost sales in the United States.

WINNERS AND LOSERS

"Many labels, which cannot be replaced by local production, will disappear from the tables of U.S. consumers, while a serious production and employment crisis is looming in Italy and Europe," Micaela Pallini, president of Italian trade association Federvini, said in a statement.

Japanese drinks maker Suntory said it will focus on selling spirits in countries where they are made as a result of tariffs.

Other major spirits and beer producers either declined to comment, did not immediately respond to requests for comment or said they were assessing the impact.

Analysts at UBS estimated that large listed spirits makers would have to hike prices by between 2% and 5% to cover the tariffs, or absorb the cost themselves and take a similar hit to operating profit.

Serious discussions about prices were underway now that tariff rates are known, said Tammy Curtis, senior vice president of commercial finance at Republic National Distributing Company, a top U.S. spirits distributor. "There will be winners and losers," she said, adding products where more of the tariff can be absorbed throughout the supply chain will fare better.

Sales of products like wine and cognac are already falling in the United States. French and Spanish wine producers told Reuters U.S. drinkers would have to pay some of the cost of tariffs. This would hurt U.S. wine businesses more than foreign counterparts, the U.S. Wine Trade Alliance added.

NOWHERE TO GO

Strategies used to mitigate tariffs during Trump's first term, such as shipping wine in bulk, would not help with these blanket levies, Allan Sichel, chairman of Bordeaux wine lobby CIVB, said.

Some producers may be able to shift manufacturing or parts of it, such as bottling. Other products like French champagne or Scotch whisky have to be made in specific countries or designated regions and cannot move production.

The Irish whiskey sector exports 40% of its production to the U.S., which drives growth and helps fund expansion in other markets, said Eoin O Cathain, head of the Irish Whiskey Association.

Companies may now shift their focus elsewhere, he continued, especially given ongoing uncertainty.

While Europe was spared the 200% tariff Trump has threatened to impose, it could still come if Europe's retaliation hits U.S. spirits, such as bourbon whiskey. "If it goes up to 200%, that'll be game over. The U.S. market will be finished," said Frederic Zeimett, CEO of Champagne Leclerc Briant which exports to the United States. ($1 = 0.9116 euros)

Reporting by Emma Rumney in London, Elisa Anzolin in Milan, Sybille de La Hamaide, Dominique Patton, Tassilo Hummel in Paris and Corina Pons and Emma Pinedo in Madrid; Additional reporting by Diana Mandia Alvarez in Gdansk and Lucien Libert in Paris; Writing by Emma Rumney; Editing by Barbara Lewis and Tomasz Janowski