New U.S. Tariffs Threaten Gen Z’s Luxury Watch Market, Driving Up Prices
New U.S. Tariffs Threaten Gen Z’s Luxury Watch Market, Driving Up Prices
A significant 39% U.S. tariff recently imposed on Swiss imports is set to dramatically reshape the luxury watch market, particularly impacting its fastest-growing consumer segment: Gen Z. This new duty, part of President Donald Trump’s latest round of tariffs, directly targets Switzerland, the world’s leading source for high-end timepieces, and is expected to lead to sharp price increases for American buyers.
For years, Gen Z, alongside younger millennials, has fueled an unexpected boom in luxury watch sales, embracing these timepieces as prominent status symbols on platforms like TikTok and Instagram. A recent BCG survey highlighted this trend, showing 54% of Gen Z respondents increased their luxury watch spending since 2021, with Sotheby’s reporting nearly a third of its 2023 watch sales to buyers under 30.
Industry experts warn that companies cannot absorb the tariff, forecasting a 12%-14% rise in retail prices as costs are passed to consumers. This financial hit is already pushing younger, price-sensitive buyers towards the pre-owned and grey markets, where they can bypass import headaches and avoid sticker shock. While the social cachet of brands like Rolex and Patek Philippe remains strong, the added cost may also incentivize Americans to purchase watches while traveling abroad in Europe, potentially avoiding the tariffs.
The shift in purchasing habits could have broader implications for the Swiss watch industry, potentially leading to a reallocation of inventory to other territories where demand remains unaffected. Furthermore, sustained weakness in the U.S. market could pressure employment and supply chains in Switzerland, forcing brands to re-evaluate their distribution and pricing strategies. While the tariff is unlikely to extinguish Gen Z’s fascination with luxury watches, it will undeniably redraw the roadmap for how and where these coveted timepieces are acquired, with a growing emphasis on the secondhand market and international purchases.
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