In recent years, Generation Z has emerged as a significant force in the luxury watch market. Brands like Rolex, Patek Philippe, and Omega have seen increased interest from younger consumers, who view these timepieces not just as accessories but as symbols of status and investment. However, a new 39% tariff imposed by the Trump administration on Swiss imports threatens to disrupt this trend.
The Impact of the Tariff
The U.S. is one of the largest markets for Swiss watches, accounting for a substantial portion of exports. The new tariff, significantly higher than those applied to other countries, has led to immediate price increases. For instance, a $4,210 watch now incurs an additional $1,892.72 in tariff costs, raising the total to approximately $6,429 after taxes. This sharp rise in prices is expected to deter many potential buyers, particularly among younger consumers who are more price-sensitive.Despite the challenges posed by the tariff, Gen Z remains a key demographic for luxury watch brands.
This generation is increasingly investing in pre-owned timepieces, with some reports indicating that pre-owned collections now account for 30% of sales growth in the Swiss watch market. Platforms like Chrono24 and Bob’s Watches have seen a surge in interest from younger buyers seeking vintage models from brands like Rolex and Patek Philippe.
In response to the tariff, some brands are adjusting their strategies. For example, British watchmaker Christopher Ward has introduced a transparent “Customs duty” line item at checkout for U.S. customers, clearly indicating the additional costs. Other brands are exploring alternative markets and adjusting their pricing structures to maintain competitiveness.