The Business of Watch [036] Collective Horology CEO Asher Rapkin And Liberty Justice Center Chairman and CEO Sara Albrecht On Suing Trump Over Tariffs

0:00Asher Rapkin:Welcome to the Business of Watches, the Hodinkee podcast where we talk to the players and the executives and go behind the scenes to see what's making pace in the watch industry. Today, we are telling a very American story and it's about tariffs. I am joined by Asher Rapkin, who is the CEO and co-founder of Collective Horology, as well as Sarah Albrecht, who is the CEO and chairman of the Liberty Justice Center, and she's in Chicago. Asher, you are in California. Welcome to the Business of Watches.

0:38Sara Albrecht:Thank you, Andy. Andy.

0:39Asher Rapkin:Asher, we are here because Collective, which is a retailer of many of the well-known independent brands that are here in Switzerland and elsewhere, you have joined a lawsuit or you are part of a lawsuit against, among others, President Donald Trump, the U.S. Trade Representative, Jameson Greer, and various other people in the administration and entities. And this is regarding tariffs. Now, tariffs have been an issue for the watch industry, I guess, since April 2025. We are on, I think, our third round of different tariffs. Asher, tell me why now Collective Horology has decided to take this action.

1:26Asher Rapkin:Sure. And thank you for your attention on this. I know it's something that is topical, but it also means a great deal to us as an industry, but me personally. Look, I got into this, as did my partner Gabe, fundamentally, because we are massive supporters of and lovers of watchmaking. I know you've met us and seen us talk about this in the past. So that's something that's, you know, a critical motivator here. But fundamentally, we're also entrepreneurs. And I think one of the lessons that I've learned about being an entrepreneur is it's often best that you go into it not knowing what you're getting into, because there's so much that will come at you that you don't know about or can, you know, can't expect.

2:09Asher Rapkin:And oftentimes we think about that in terms of building a business normally, you know, what's involved in building capital or, you know, building a boutique or any of the things that go into just selling watches. But this was a new one for us last year when we saw tariffs come and hit the industry as hard as they did. And I remember, if you recall, this happened, the so-called Liberation Day tariffs happened in the middle of Watches and Wonders. I remember it well. And it landed like a lead balloon, you know? I mean, people were walking around that show jubilant one day and absolutely catatonic and stunned the next.

2:47Asher Rapkin:And we all were wondering what on earth we were going to do. And as an industry, you know, I was really proud of us. We somehow figured it out in that first range of tariffs. And then in the summer of last year, when the 39 percent tariff hit, again, we all started to ask ourselves these real questions of can we survive this? And I just want to put that into context. I mean, we're a watchmaking industry. We've survived for hundreds of years. And yet now, based on an action from one government in the world, we were all asking if we could possibly survive. And it was brutal. And we did. And we have.

3:31Asher Rapkin:But what we've seen is that even though those initial tariffs were proven to be illegal, in large part due to the work of Sarah and her team, actually entirely really due to the work of Sarah and her team, they immediately came with another range of tariffs. And now yet again. And I think for us, we just have had enough. We've had enough of this. And we believe profoundly in the power of things like tariffs. We see them as a useful tool, but we believe they are being misapplied here. and we think it's unjust. And as a result, we have decided to step up and be a party to the suit. And so, you know, this round of tariffs is the one from which you've decided has been the catalyst for you to take action.

4:13Asher Rapkin:Sarah, talk to me about the Liberty Justice Center, what your role is in this legal action and what the legal basis is for your argument here to have the tariffs not be applied? Or am I interpreting that correctly? Tell me.

4:34Sara Albrecht:Yeah, I'll start at the beginning because we were the first to file a case against the illegal IEPA tariffs. We filed that case April 14th. That was the one that ultimately ended up at the Supreme Court that struck down the IEPA tariffs. So that was our fight. It was a huge fight. And just to put it into context, we are a team of 12 attorneys spread out all across the U.S. We're a nonprofit. We, you know, fight constitutional injustices. And this was the biggest hill we've ever had to climb. And it's such a David and Goliath story, probably an overused term. But in this case, it is really the appropriate term.

5:15Sara Albrecht:and we got into this fight because just like Asher said, tariffs do have a purpose. But when they're misapplied and the separation of powers gets blurry, then we felt we needed to step in. So we did. We struck them down. And then five hours later, after we won on February 20th, he announced the Section 122 tariffs. And we had considered that he was probably going to do that. We weren't really sure if he was going to announce them immediately like he did. So we were ready. We stood back and thought, institutionally, do we want to take on another tariff fight? We're not trade attorneys. We're constitutional attorneys.

5:54Sara Albrecht:But we felt like, what good is a constitutional win if he just does it again in a different form? So is it really a win? Kind of a philosophical question. And we decided, nope, we need to finish this job. and we wanted to see it through. So we filed on March 8th. That case was heard in April and we got our favorable decision from the Court of International Trade in May. And then we thought, okay, now we're done. But we knew that tariffs were gonna run off. And one of the reasons we wanted to file on that case was it was a section that allowed tariffs for 150 days, which got you to July 24th, which is kind of where we find ourselves now.

6:36Asher Rapkin:And that was the day, I believe, you filed this suit, right? Yes.

6:41Sara Albrecht:We wanted to make a point. And one of our concerns was the administration kind of resetting 122 and starting for another 150 days and, you know, kind of continually doing that. We thought that could be an option. And then certainly we thought one of the other statutes, he might try and use 338, 301, 232 in some form. so we weren't sure which direction he was going to go, but we kind of settled on he was probably going to do 301 because then he announced he was going to do 301 to replace the IEPA tariffs, which brings us to why this is such an important issue. It is not about forced labor, which is reprehensible and, you know, not justifiable in any way.

7:30Sara Albrecht:It's just about replacing the tariffs lost on IEPA in a pretextual way, and it's not being appropriately applied. This tariff applies to 85 countries, and those countries have different rules about forced labor and different requirements. And you can't tell me that 99.4 % of the imports into the United States are in violation of forced labor statutes in their home country. It's just not possible. And he's also kind of reaffirmed that because I keep a list of every time the administration says something like, we're just trying to replace the AIPA tariffs or the Section 122 tariffs. So that's kind of the core of our fight.

8:18Sara Albrecht:It's not so much the constitutional issue that the AIPA was. It's more an Administrative Procedures Act violation. Like, this was not the proper way to do that. And this is not the intent of 301. 301 is supposed to be very targeted, very focused. So there's this mismatch between problem and remedy that we're dealing with here. And I'm hoping the court agrees with us.

8:44Asher Rapkin:Asher, this is a story about the watch industry. I mean, you are a watch dealer. How have tariffs impacted, first of all, your business? And how do the idea of tariffs, which is about preserving American industry, American jobs, American skill and know-how, how does that apply to watches specifically, do we think? Like, look, we are, and we've been very public and honest about this for years, you know, we don't have investors. We're self-funded. And my business partner, Gabe Riley, and I quite literally poured our life savings into this business at great risk and peril, as any entrepreneur will tell you, to build this business.

9:31Asher Rapkin:And we built it one block at a time. And that's been very important to us so that we could maintain integrity and control over this business. And all sorts of uncertainty comes your way, but the significant amount of financial uncertainty created by this regime of tariffs has made it incredibly difficult for companies like ours to plan, to grow, to do all the things that I would argue we have worked hand over fist for years to accomplish and are being starved of those resources for no clear national interest that we can discern. and you know there's the literal cost of the tariff you know like it's more expensive for me to buy things now but the tariffs at least on switzerland have also been extraordinarily erratic you know we've gone from 30 to 10 to 12 to 39 to 12.5 the numbers there are so dramatic let alone the second and third order issues that have come out of this economically like the depression of the U.S.

10:35Asher Rapkin:dollar against the Swiss franc. So when you look at all of those elements together for us, for any other, you know, watch importer, whether they're huge, like, you know, your parent company watches in Switzerland or ours or us as a smaller entity, like it is a meaningful bit of headwind that we have to address. Second, you know, when you look at independent watchmakers, independent watchmakers, some of these watches might be objectively or, you know, expensive. the absolute price might be expensive but nobody's getting rich selling these and making these um take it from me and i you know we do this because we we love it and when you start tacking on these these additional fees and costs you put barriers in front of clients who want to invest in this art form and you make it harder for for independent brands to grow so it's a real issue for us as champions of independence and as a final point you know look i love american watchmaking i've been a supporter of American watchmaking since the day we opened our doors.

11:34Asher Rapkin:One of the first brands we retailed was J.N. Shapiro. And we were his first American, his first, not only American retailers, first retailer period. You know, just on Monday, we released an episode of our podcast with Carell Bichand, who's the CEO of Barrelhand, you know, who is another incredible American watchmaker. We believe profoundly in the opportunity of the American watch industry, but it's a tiny little industry right now. And it is impossible to replace our business, not that we want to per se, but even if we did, to replace our business with entirely American-made watches because there just isn't an industry for it.

12:13Asher Rapkin:And on top of that, if an American watchmaker wants to get started, they need the Swiss supply chain to do it, at least just to get started. Even Josh Shapiro, you know, his first watches used German movements. So what we're really doing here is we're making it harder for American businesses to actually develop an industry. We're making it harder for American businesses to actually grow and sell and succeed in the lane that they're in. And we're making it harder for our trading partners to do it too. So when you add all that up together, it's bad news. And how much do you, I bet you know, how much you've paid in tariffs?

12:51Asher Rapkin:I mean, In the lawsuit, you talk about, you know, in the next few weeks having, I think, around$69 ,000 worth of, I guess that's wholesale price sort of stock coming in. And that means you're on the hook for something like$8 ,200 worth of tariff fees. I mean, with all the rounds of tariffs that we've had, what has that meant for the bottom line of your business? How much have you paid? Sure. So we've we paid over one hundred and sixty four thousand dollars in IEPA tariffs, which we are due refunds plus interest on. And we haven't gotten that on top of that. You know, there's the tens of thousands of dollars.

13:27Asher Rapkin:We haven't added it all up yet, but I'm sure we we will on the Section 211s that were paid up until last Friday. And then, of course, you know, what was in the lawsuit regarding 301s. That's just this week. That's just this week. So when you add all these things up, there's hundreds of thousands of dollars that we have lost use of at Collective because of this. And, you know, look, on the one hand, like we're lucky, you know, we were able to weather that. But that's not the kind of thing I want to be lucky about. So I am on the one hand, you know, appreciative that we run our business in a way that allows us to survive and grow still even facing this.

14:09Asher Rapkin:But I should not have to fight this battle. This is not a thing in my mind that I should be using my time and effort and energy on. I would far prefer to be talking to you about the watchmakers that I believe in and the, you know, the art form that I've invested my life in, not the finer points of trade law. We've seen various companies in various facets of the industry approach this challenge, this problem of tariffs in different ways. I mean, I guess last year we saw a very high-profile White House visit from the CEO of Rolex, Mr. Rupert, the chairman and majority owner of Richemont, one of the biggest Swiss watchmaking conglomerates in the world.

14:54Asher Rapkin:And basically, you know, they, I guess, lobbied President Trump or at least had a business meeting with him, laying out the facts and laying out the situation that Switzerland had been put in by the tariffs. You are taking legal action. I mean, this is litigation. Why not simply lobby and tell your case to the administration? I mean, I'll let Sarah answer the why litigate, but I'll give you the personal experience of this. I mean, look, when the IEPA tariffs hit, I'll be honest with you, I felt very helpless. I mean, I struggled with it a lot. I lost a lot of sleep. My business partner and I asked, what are we going to do?

15:36And it just felt like we were free floating.

15:40Asher Rapkin:So I tried to anchor. So what did I do? I reached out to other small businesses in my Southern California community. I joined my chamber of commerce, which I had never been a member of, and tried to figure that out. I obsessively and regularly called my local congressman Carbohol's office regularly. I called my senator's offices regularly. You and I were talking a lot on text in terms of what was happening in Switzerland as well. Yeah, totally. And, you know, while I got, I think, a lot of empathy from my elected representatives, there was essentially nothing but lip service there. and it became very apparent to me that the solution wasn't outside wasn't nobody was going to solve this for me except I guess uh liberty justice but um you know essentially nobody was going to fix it so we had to figure that out and um we wove through the obstacles that were in front of us but given the opportunity to take actual action that you know could potentially result in a favorable outcome, which is litigation, ultimately at this point, 15, 16 months later, felt like to us, 100 % the right choice.

16:53Asher Rapkin:I mean, Sarah, I'd love to hear your point of view on that too, since you're the person who's actually brought this.

16:58Sara Albrecht:Yeah. I mean, even though we're a law firm, it's always kind of a last resort to have to file litigation. Like I would love it if lobbyists could actually get their job done. I'd actually love it even more if Congress would start doing their job because they could have stopped all of this at the beginning. They could have stopped it in the middle and they could stop it now. And they're choosing not to. I get it. It's a choice. But, you know, at some point, you know, all of our voices need to be heard. And the Chamber of Commerce across the country, they do great work for a number of different industries.

17:31Sara Albrecht:But in this specific case, it's not going to be effective. You can have all the lobbyists going to the White House that you can find, and I don't think anything's going to be heard. They are determined. They've made that very clear time and time again, no pun intended, but kind of, that this is a revenue issue for them. It's not anything else. And it's not even about fair trade. Because if you look at the Swiss tariffs on U.S. products, that's not equitable.

18:06Asher Rapkin:So there was never reciprocal terrorist. No. And so, Sarah, tell me, what is the legal procedure here? What happens next? And let's be explicit. Let's be clear. What is the outcome and the remedy that you're hoping here for? I mean, it's not only collective horology that's a plaintiff in this. There's also a spice importer who is on the complaint. Do you intend to bring on more plaintiffs or tell me what this is going to look like over the next little time? Sure.

18:41Sara Albrecht:So for the IEPA tariffs, we filed on behalf of five businesses. When it was ultimately struck down, then the remedy applied to every business. So we're in court right now finalizing the refunds. We've gotten$90 billion paid back to small businesses, large businesses out of the$166 billion. I know Asher's still waiting for some of his refunds, but I'm confident he will have those. And then Section 122, we're going to go through the same thing. Section 301, we did something a little different. So while we have two named plaintiffs, we also asked the court to recognize a class certification so that by default, the class that we chose to use is called a Rule 23B2, which is an administrative class, which by default, then every business is eligible to be in that class.

19:33Sara Albrecht:There's no opting in, there's no opting out. It just kind of covers it so that when and if we get to a refund stage, we won't have to worry about who's eligible and who's not. And so we're kind of in a class certification stage on the final set of IEPA tariffs that the government is arguing about. This isn't a procedure that's normally used at the Court of International Trade. So these two separate cases, I think, will determine a path forward for all of this tariff situation that we're experiencing. So August 6th, we have a hearing on the IEPA class, and then our complaint addresses that, and the court will address that when we get our court date.

20:19Asher Rapkin:And was it unusual for you to name the president himself and Jameson Greer as defendants here? Or was that the typical procedure for such a lawsuit?

20:33Sara Albrecht:In the first lawsuit, we did name the president as the primary defendant, mainly because it was a constitutional issue. Because Section 301 is actually a valid trade section and tariff section, we chose, and I think appropriately, to name Jameson Greer, just because we also wanted to spread the litigation love around. And so Trump is still named in there. But, you know, it's also not—we don't want to make this a political issue. because it's not. It's, you know, whether it's this president or the next president, they can't do this and they can't make up the rules for statutes that Congress laid out.

21:14Sara Albrecht:Congress made it very clear what they wanted this statute to be used for. And so the president can't just arbitrarily change that.

21:23Asher Rapkin:I was just gonna add, I mean, separate from everything that Sarah just said, you know, look, part of the reason we also decided to join this, and I think, you know, because it's not, it's not an easy decision, you know? The reason we decided to do this is we went back to, like, what is even the purpose of Collective in the first place, you know? And, like, the whole reason that we did this, the whole reason that we pivoted, you know, six years ago from just doing collaborative watches and the rest to retail was because we wanted to make independent watches more accessible in the United States.

21:53Asher Rapkin:And the simple reality is that tariffs have made independent watches less accessible in the United States, full stop. and this is absolutely not in my business plan. Like this is not a thing we ever could have conceived would have happened. But at the same time, you know, Andy, you know a lot of the people that we represent. You know that these are not gigantic corporations. These are people who are really operating out of passion and not out of, you know, they're not making huge profits. They're not, you know, rolling in cash. They're doing it because they fundamentally love it. And the thing is, this isn't just an American problem, because what's happening based on how America sits in the world economy, the choices that we make, of course, ripple across the rest of the world.

22:43Asher Rapkin:And it's having implications on the entire supply chain for the Swiss watch industry, the entire, you know, correct me if I'm wrong, if you think I'm mischaracterizing it, but the entire Swiss economy. and and these are this is an economy that has literally not only supported an art form i believe in but put food on my table i mean like literally sustained my family so i i think there's a lot more here that to look at and it's easy sometimes to just say oh well they don't want to pay extra taxes or like ah then you know it's really expensive but there's a lot more to it and you know commerce and trade and society and art and these things are all deeply intertwined and we can't tease them apart.

23:24Asher Rapkin:We have to look at them as one gigantic entity that is working together. And if we do, I think it becomes a lot clearer why, as Sarah pointed out, this isn't a political thing. This is an issue that impacts everyone, regardless of where they may sit socially or politically or whatever. This impacts us all. And as a result, I think is an important case for us all to pay attention to. No doubt. And last thing, Asher, I mean, yeah, the lawsuit was filed on July 24th. You've started doing the media rounds, including some high profile appearances on CNN, no less. What have you heard from your colleagues, people in the industry?

24:07Asher Rapkin:Has there been any reaction from the government or, you know, opposition side so far? I think the general response from our clients, from colleagues in the industry has been incredibly supportive and very positive. The gist that I get or the vibe that I get from those that have spoken up is that there is a lot of frustration in our community about all of this. And a similar, as I described earlier, a similar feeling of like frustration and helplessness and a feeling like something is being done to you and that there's nothing you can do about it. So I think a lot of people are being very positive in the same way that I was incredibly excited and supportive.