Supreme Court
Overturns Trump Tariffs
Much Ado About Nothing
President Trump’s announcement of international tariffs sent shockwaves across the globe. In a sudden move, he imposed 35% tariffs on Switzerland, causing significant disruption to the Swiss watch industry. This unexpected action prompted Rolex’s CEO, Jean-Frédéric Dufour, to attend a meeting in President Trump’s Oval Office, accompanied by other prominent Swiss business leaders.
It’s intriguing to note that according to the Federal Reserve, Goldman Sachs, UBS, and Deutsche Bank, approximately 85-90% of the tariff costs are borne by American consumers. I recall when President Trump, during his initial administration, imposed tariffs on China, he expressed his determination to exert pressure on the Chinese economy. He suggested that the Chinese companies would be adversely affected by having to pay the tariff. However, the reality was that the Chinese economy remained largely unaffected, as the burden was passed on to consumers and manufacturers who had to bear the cost. In essence, tariffs act as an invisible tax on American consumers, significantly increasing the prices of goods.
Tariffs are a form of Taxation
As we recently learned, the U.S. Supreme Court overturned President Trump’s tariff scheme, resulting in companies being refunded $133 billion. This begs the question: what is the impact of this on the price of Rolex watches? While it’s uncertain, it seems unlikely that new Rolex prices will be significantly affected. President Trump initially reduced Swiss tariffs to 15%, but these have been overturned. If his new tariff scheme is successful, Switzerland will end up imposing a 10% tariff on all imports, which is favorable news for Rolex brand purchasers.
