Openwork: Inside the Watch Industry – Episode 69 Tariffs Overturned: Relief or False Hope? – Plus Rolex & AP Grow on Scarcity

Podcast Date: February 23, 2026 Hosts: Asher Rapkin & Gabe Reilly (Collective Horology)

Episode Overview

This episode opens with in-depth analysis of the U.S. Supreme Court's February 2026 decision overturning Trump-era tariffs on Swiss watches, exploring what this means for the watch industry and watch prices, as well as likely next moves from the administration. The conversation then transitions to recent changes in COSC chronometer standards, offering insight into the culture of watch accuracy and collector expectations. The episode concludes with discussions of Audemars Piguet and Rolex’s financial growth strategies in a shrinking industry and debates about scarcity, customer experience, and what separates microbrands from independents.

Key Discussion Points & Insights

1. Breaking News: U.S. Supreme Court Strikes Down Swiss Watch Tariffs

[00:55–07:56]

• Summary of the Ruling:

  • Trump administration’s emergency tariffs (15–39% on Swiss watches, also EU/UK) declared illegal under the International Emergency Economic Powers Act (IEPA).
  • Supreme Court’s 6–3 decision effective immediately, no wind-down period.
  • "Every reciprocal tariff...are now illegal, and that's effective immediately." – Asher Rapkin [03:01]

• Government Response:

  • Plans to reintroduce global tariffs under Section 122—capped at 15%, max duration of 150 days without Congressional extension.
  • Election-year timing complicates political calculus.

• Refunds for Past Tariffs:

  • No clarity on refunds for ~$200 billion paid; Supreme Court remained silent on this aspect.
  • Likely to involve further litigation and administrative complexity around customs law.

• Immediate Impact on Watch Prices:

  • Unlikely any immediate relief; administration expected to quickly impose new tariffs.
  • Currency weakness, especially the dollar’s decline vs. Swiss franc, remains a bigger driver of price increases.
  • "The thing really driving up watch prices hasn't actually been tariffs, it's been currency exchange. The dollar has fallen dramatically..." – Gabe Riley [07:14]

2. Watch Accuracy, Certification, and COSC’s Excellence Standard

[08:05–22:13]

• Watch Accuracy in Culture:

  • Listeners often inquire about watch accuracy; most issues stem from misunderstanding how tested accuracy translates into real-world performance.
  • Brands like COSC, METAS, and in-house standards (Rolex’s Superlative) each define differing benchmarks.

• Introduction of COSC's New ‘Excellence Chronometer’ Standard:

  • New standard falls between current COSC and METAS; -2/+4 seconds/day (METAS is 0/+5).
  • Tests are performed on cased watches, include anti-magnetism (200 gauss vs. METAS’s 15,000 gauss).
  • "It feels to me like a half measure unless there's something I'm missing here." – Gabe Riley [15:47]
  • Business logic: COSC wants to defend market position, but avoids setting standards so tight that brands risk costly warranty claims from collectors.

• Collector Behavior & Expectations:

  • Largely, collectors misunderstand how much real-world performance will diverge from factory certification. Most client returns over ‘accuracy’ are actually performing within specification.
  • "The idea that we're now issuing an even higher standard...just sets bad expectations with collectors and bad expectations around accuracy." – Gabe Riley [16:43]
  • Many indie brands skip formal chronometer certification to keep costs down; most mass-market movements are reliable enough for fair expectations.

3. Audemars Piguet’s Growth: Revenue, Scarcity & Client Experience

[22:23–37:35]

• Financial Results:

  • AP up 10% revenue in a tough 2025, to $2.6B—tripling in 10 years.
  • Growth attributed to price increases, a focus on complications/high-end pieces, and shifting distribution (now 90% via AP-owned boutiques).

• Strategic & Leadership Dynamics:

  • Current growth largely attributed to outgoing CEO’s strategy (“Benhama’s strategy”). New CEO, Ilaria Resta, will increasingly put her stamp on the brand.
  • Background in consumer packaged goods; focus expected on marketing and customer experience.

• AP’s Customer Experience Critiqued:

  • AP’s high barriers to purchase (boutique only, vetting process) create “mystique” but alienate some buyers.
  • "They wanted me to get on an airplane to go get it, and I respectfully declined because I don't have the time for that. I have a family." – Asher Rapkin [35:57]
  • Brand values additional effort as value creation through exclusivity, even if it means losing some clients.

• Boutique Model Pros/Cons:

  • Boutique-only approach allows for high margins (full retail vs. wholesale) but means limited access and strong gatekeeping.

• Growth in Women Buyers:

  • AP reports women now 25% of clients, aiming for 30% in two years.

4. Rolex: Market Share, Production Cuts & Manufactured Scarcity

[37:35–50:14]

• Production & Scarcity:

  • Industry analysis suggests Rolex has cut production two years in a row while increasing market share—rose from 57% (2023) to 61%.
  • Indicates the broader market is shrinking and Rolex is not chasing volume growth.

• Rolex CPO Program:

  • Certified Pre-Owned program not just a revenue stream (estimated CHF 0.5B) but sets a price floor for secondhand market, supporting brand perception and residuals.
  • "What it really is...which is a method of price control in the secondary market." – Asher Rapkin [40:41]
  • Exceptional reliability/QC lets Rolex back up CPO watches confidently.

• Strategic Mindset:

  • As a charity-owned company, Rolex can think long-term and focus on protecting equity and relevance, prioritizing steadiness over innovation.

• Artificial Scarcity Debate:

  • Some criticize Rolex for “manufactured scarcity”; hosts clarify this is about brand management and sustaining value, not simply limiting supply.
  • "If you say, sure, like release the constraints on demand so that everyone can get the watch they want...we'll hear complaints about...secondary value...depressed." – Asher Rapkin [47:12]
  • For the hobby, Rolex’s success and ubiquity help sustain global interest in watches.

5. Independent Watch Brands: ‘Value Trap’ and Defining Maturity

[50:14–56:59]

• Microbrands vs. Independents:

  • Microbrands often get stuck in a “value proposition” trap—hard to gain prestige or pricing power if value is the primary selling point.
  • Ming is cited as a brand that avoided the value trap by focusing on design, not on price.
  • "When you position yourself around value, it becomes impossible to get out of that trap." – Gabe Riley [51:43].

• Graduating to Independent Status:

  • Real marker is maturity: distinct, consistent design language and commitment to an identity (not erratically shifting products, not constant discounting).
  • "I think the difference between a micro brand and an independent is maturity." – Asher Rapkin [53:02]
  • Brands like Brew achieve “independent” status for this reason, as opposed to purely value- or trend-driven brands.

Notable Quotes & Memorable Moments

• On Tariffs & Refunds:
  "Nobody knows how, if or when that's going to happen." – Asher Rapkin on tariff refunds [06:01]
• On Chronometer Certification:
  "It feels to me like a half measure unless there's something I'm missing here." – Gabe Riley on COSC’s Excellence Standard [15:47]
• On AP’s Customer Policy:
  "They wanted me to get on an airplane to go get it, and I respectfully declined because I don't have the time for that. I have a family." – Asher Rapkin [35:57]
• On Rolex Scarcity:
  "Rolex is like the beachhead of watch enthusiasm... It keeps watchmaking relevant." – Gabe Riley [49:34]
• On Moving Beyond Microbrand Status:
  "If it's a fast growing micro brand, how will I know it's become a cemented and trusted independent? Because it's got a distinct point of view that continues to execute and fire on all cylinders." – Asher Rapkin [54:17]

Important Timestamps

• 00:55–07:56: Supreme Court strikes down tariffs – background, industry implications, and likely next moves
• 08:05–22:13: Watch accuracy, COSC’s Excellence Standard, and collector expectations
• 22:23–37:35: Audemars Piguet’s growth, client experience, and boutique strategy
• 37:35–50:14: Rolex’s market share, production cuts, CPO program, and scarcity debate
• 50:14–56:59: Microbrands vs. independents, value trap, and what defines brand maturity

Conclusion

This episode of Openwork delivers a nuanced view of big industry shifts—from regulatory changes affecting Swiss watches to the evolving standards of timekeeping accuracy and the basket of strategies deployed by AP and Rolex to not only survive, but thrive. The hosts challenge conventional wisdom on scarcity and microbrands, with candid stories and industry-insider analysis that offer actionable insights for collectors and watch insiders alike.