Sports Watch Tariffs – Which countries and Brands are impacted

Earlier this week, I considered the financial impacts of high China tariffs on Coros’s smartwatches. The effect of a proposed 145% tariff in June 2025 is disastrous for the company and those in the same situation.

Key short-term risk factors to look out for when considering the impact of new Tariff regimes on any company in 2025  are

• Reliance on non-premium price products (gives no margin to play with)
• PCB assembly in China (determines country of origin)
• Significant dependence on the US market. (US tariffs affect a more significant portion of the business)
• Challenger brands with funding constraints (inability to ride out short-term issues)

Unfortunately for Coros, it ticks all those boxes.

Other factors like brand loyalty and control of the retail distribution chain come into play, but those are less important, even though Coros does score well with them.

While Garmin will be impacted, so will every smartwatch company, as none are manufactured in the USA. It’s just that the China link causes the most significant issue, and Garmin mitigates that with Taiwanese production.

Companies like Apple & Google will also be impacted significantly. Still, they can probably cobble together a profit by supplying the US entirely from its Vietnamese or Indian production, although Vietnam (46%) attracts worse tariffs than Taiwan (32%) and India (27%).

You might think Coros’s situation similarly impacts companies like Polar or Suunto, but no. They do much less business in the USA, consequently affecting them less.

Take Out

The table shows that the US administration has identified the correct problem that we see here, typified in many other tech-centric industries. Too much is made in Asia, and China in particular.

In the short to medium term, tariffs can have no positive impact as moving production takes years, not months. If an Administration wanted to pursue tariffs, which do have their place, perhaps a more sensible approach would be to announce progressive increases over each of the next 5 years, enabling businesses the certainty to plan to achieve the goal of onshoring as rapidly as possible. Hey, what do I know?!

The disastrous situation for Coros and bad for everyone else means something has to give. A different tariff and regulatory regime must emerge; otherwise, multiple industries will be decimated, and a global recession or depression will follow.

The key thing for lovers of smartwatches to watch out for is the differential treatment of tariffs that will likely emerge between Vietnam, Taiwan and China.

My take on that last issue would be that the President has singled out China for the heavy treatment. In the long term, that can only favour better-placed and better-resourced wearables companies like Apple, Google and Garmin.