Impact of Supreme Court Tariff Decision on Watch Prices

Supreme Court Strikes Down Emergency Tariffs, But It's Complicated

On February 20, 2026, the United States Supreme Court issued a decisive 6–3 ruling overturning President Donald Trump’s use of emergency powers to impose broad “reciprocal” tariffs — including the 15% tariff on Swiss goods that directly affected Swiss watches. At one point those tariffs reached as high as 39% before being negotiated downward. As of February 20, 2026, tariffs imposed under the 1977 International Emergency Economic Powers Act (IEEPA) are illegal and no longer in effect.

On its face, this sounds like a major win for importers and consumers alike. But as is often the case with trade policy, the reality is more complicated.

What the Supreme Court Actually Decided

IEEPA was originally designed to give the executive branch tools to respond to national emergencies, typically through targeted economic sanctions. The Trump administration interpreted that authority broadly, using it to justify sweeping tariffs across large segments of global trade, including Swiss watches.

Those actions were challenged in court, consolidated into a larger case, and struck down repeatedly at lower levels before reaching the Supreme Court.

In a strong rebuke, the Court held that IEEPA simply does not authorize tariffs. Importantly, the ruling took effect immediately. Unlike earlier decisions that gave the government time to unwind the measures, the Supreme Court provided no grace period. As of today, the blanket 15% tariff on Swiss imports imposed under IEEPA is gone.

Why Tariffs Aren’t Going Away – At Least Not Yet

This ruling does not eliminate tariffs across the board.

More targeted duties — such as those imposed under other trade statutes on steel, aluminum, automobiles, and certain manufactured goods — remain intact. And within hours of the ruling, the administration signaled it would pivot to a different legal pathway: Section 122 of the Trade Act of 1974.

Under Section 122, the president can impose temporary global tariffs capped at 15%, but only for a maximum of 150 days unless Congress votes to extend them. The White House has already said a new 10% surcharge will begin Tuesday and run for that 150-day window.

Unlike IEEPA, this authority can’t be endlessly renewed, and it comes with tighter statutory constraints — especially as midterm elections approach. The legal battlefield has shifted, but the tariff debate is far from over.

The Refund Question

Another major unresolved issue is what happens to tariff revenue already collected.

The Supreme Court did not address refunds directly. It neither mandated them nor ruled them out. Estimates vary, but reporting suggests well over $100 billion is potentially at stake, with some analyses placing possible refunds around $175 billion.

Whether importers — including watch retailers and distributors — ever see that money again remains unclear. Customs law includes strict timelines for disputing imports, and unwinding years of collections would require an enormous administrative effort. Further litigation seems likely.

For now, there is no defined process and no clear path to checks in the mail.

Will Watch Prices Come Down?

Naturally, this is the question most collectors are asking.

The short answer is probably not.

Even if the original 15% tariff disappears entirely, several realities remain. A likely 10% replacement tariff appears imminent. The U.S. dollar has weakened materially against the Swiss franc. And currency volatility continues.

As we’ve discussed many times, foreign exchange — not tariffs — has been the dominant driver behind Swiss watch price increases. The dollar’s decline against the franc directly raises wholesale costs, which ultimately flow through to retail pricing.

The Bigger Picture

Zooming out, this decision represents a strong rejection of using emergency powers to impose sweeping economic policy. But it does not signal a broader move toward lower trade barriers. It simply changes the legal framework under which tariffs are pursued.

Between potential replacement duties, ongoing currency pressure, and wider geopolitical trade dynamics, the watch market remains in a state of cautious equilibrium.

As always, we’ll continue tracking developments closely and keep you updated as things evolve. For now, the headline is simple: emergency tariffs are gone — but price relief is not.