U.S. watchmakers warn of 'catastrophic harm' from tariffs

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(The Center Square) – U.S. watchmakers filed a rare brief to the U.S. Supreme Court detailing how President Donald Trump's tariffs have upended a global industry that depends on specialty manufacturers.

The American Watch Association and Jewelers Vigilance Committee filed a friend-of-the-court brief in a case before the high court challenging the president's tariff authority.

The Supreme Court has set oral arguments for Nov. 5. Trump said the stakes in the case are so high that he may personally attend.

The two groups noted that they rarely engage at this level.

"Amici do not often have occasion to participate in matters before this Court. But this case – like the claimed tariff authority at issue – is exceptional," attorneys Jeffrey Sandberg and Noah Zimmermann wrote on behalf of the groups. "Because of the challenged tariffs, Amici's members now face radical and unavoidable cost increases, with cascading negative effects for American businesses, workers, and consumers."

The American Watch Association and Jewelers Vigilance Committee said they filed the brief to "provide a ground-level look at the pervasive harms inflicted on the U.S. economy within just one of many industries injured by the President's sweeping tariffs." Stores are already closing and laying off employees after Trump put tariffs on every U.S. trading partner, including key watchmaking hubs in Switzerland (39% tariff) and Japan (15% tariff). 

"That is because watchmaking is a globally integrated industry that depends upon longstanding specialty manufacturers abroad for essential watch components," attorneys for the groups wrote. "Faced with an upsurge in costs, many of Amici's members are already being forced to lay off employees, close storefronts, or increase consumer prices. Amici submit this brief to provide a ground-level look at the pervasive harms inflicted on the U.S. economy within just one of many industries injured by the President's sweeping tariffs."

The groups said the precise manufacturing they need isn't available in the U.S. or much of the rest of the world.

"Amici's members depend on specialized precision components available exclusively abroad, primarily in Switzerland and Japan," attorneys wrote. "There exist no domestic substitutes for these Swiss and Japanese watch components at the necessary commercial scale in the United States, nor is there any realistic prospect of generating the capabilities necessary to manufacture them in America."

Trump has said he wants to use tariffs to restore manufacturing jobs lost to lower-wage countries in decades past, shift the tax burden away from U.S. families, and pay down the national debt. The watchmakers said their businesses are on the line.

"The challenged tariffs obstruct this stream of commerce. Taxing watch imports will certainly result in higher prices for American consumers. But the tariffs will also cause U.S. businesses to reduce their short- and long-term investments, lay off employees, or even close their business entirely," attorneys wrote. "And given the absence of any domestic suppliers and the unusually high startup costs for precision manufacturing, there is no realistic prospect that the President's tariff program will spur the creation of new manufacturing jobs in the United States. In short, the challenged tariffs unequivocally harm U.S. businesses, workers, and consumers."

According to a report from the U.S. International Trade Commission, imports of watches and watch components totaled more than $7 billion in 2024. 

U.S. Treasury Secretary Scott Bessent previously told the nation's highest court that tariffs are the only way Trump can protect the U.S. from "a major economic and national-security catastrophe." Before using tariffs, Trump declared a national emergency over fentanyl smuggling and long-standing U.S. trade deficits that he said were at a tipping point that could lead to financial disaster.

"Due to IEEPA tariffs, six major trading partners and the 27-nation European Union have already entered into framework deals with the United States, accepting tariff arrangements heavily recalibrated in America's favor and agreeing to make approximately $2 trillion of purchases and investment in the United States' economy – with trillions more under negotiation with countries across the world," Trump's legal team wrote in an earlier filing with the U.S. Supreme Court.

Two lower courts have already said the 1977 International Emergency Economic Powers Act doesn't give the president unbounded tariff authority.

The U.S. Court of Appeals for the Federal Circuit affirmed a previous lower court ruling, but said Trump's tariffs could remain in place while the administration appeals to the U.S. Supreme Court. In the 7-4 decision, the majority said that tariff authority rests with Congress.

The Congressional Budget Office estimated that Trump's tariffs could generate $4 trillion in revenue over the next decade, but they would raise consumer prices and reduce the buying power of U.S. families.

A tariff is a tax on imported goods that the importer pays, not the producer. The importer pays the cost of the duties directly to U.S. Customs and Border Protection, a federal agency.