Gen Z was growing obsessed with luxury watches. New tariffs on Switzerland could cool the expensive hobby

Gen Z—alongside younger millennials—have embraced luxury timepieces as status symbols, posting them on TikTok and Instagram and helping reshape an industry long dominated by older collectors. A recent BCG survey found 54% of Gen Z respondents had increased their spending on luxury watches since 2021, and Sotheby’s estimated nearly a third of its watch sales in 2023 went to buyers age 30 and under.

But a new 39% U.S. tariff on Switzerland could make this hobby more expensive and potentially less attainable for first-time buyers. The duty, imposed during President Donald Trump’s latest round of tariffs, hits the world’s most important market for Swiss watch exports. From January to June, the U.S. overtook Japan and China as the top destination, with $3.17 billion ( 2.56  billion Swiss francs) worth shipped, according to the Federation of the Swiss Watch Industry.

“Companies cannot realistically absorb the tariff, which means retail prices in the U.S. will rise sharply,” Marcus  Altenburg, managing partner at Swiss law firm Goldblum & Partners, told Fortune.

For American buyers, especially younger ones, the math is straightforward: Prices are going up, Anish Bhatt, a millennial “watchfluencer” with 1.6 million followers on Instagram, told Fortune. While the 39% levy applies to an importer’s cost, not full retail, industry analysts predict a12% to 14% increasein store prices if brands pass on the cost to consumers.

“For many American collectors, the 39% tariff instantly turned new releases from Swiss brands into a luxury few can justify,” Joshua Ganjei, CEO of European Watch Company in Boston, told Fortune. “The pre‑owned market is now the best option for value and immediate availability—no import headaches and no sticker shock.”

That shift to secondhand is already underway, since availability in the primary market is so limited, Bhatt said.

Still, a 2024 report by Watchfinder & Co. found 41% of Gen Zers ages 16 to 26 came into possession of a luxury watch the previous year, and individuals in this age bracket who are ready to buy a luxury timepiece said $10,870 would be the starting point for their next purchase. The same report found that Gen Z watch enthusiasts acquired an average of 2.4 firsthand watches and 1.43 pre-owned in 2023, with over half buying for themselves.

Altenburg expects Gen Z and millennial buyers, who tend to be more price‑sensitive than older collectors, to gravitate to domestic pre‑owned and gray‑market sellers to sidestep tariffs. Ganjei said his company has “seen a dramatic increase in purchasing volume over the past few months as U.S. buyers shy away from international sellers.”

On the other hand, watchfluencer Bhatt said younger consumers still crave the “social currency” that comes with a Rolex, Patek Philippe, or Audemars Piguet, even if they pay more to get it.

“They also understand the status that it gives them,” Bhatt said. The social cachet of a Swiss-made watch plays out daily on social media platforms like TikTok, Instagram, and influencer channels, boosting aspirational demand, he said.

Bhatt doesn’t expect demand for the most coveted brands to vanish but says mid‑tier Swiss names without top brand prestige could see sales slow. The added cost may also push Americans to buy while traveling in Europe—where they can sometimes reclaim value added tax (VAT)—and bring pieces back themselves, potentially avoiding tariffs altogether, Bhatt said.

“It could be that allocation of pieces is shifted toward other territories over time,” he added, “because they see demand increase in Europe or the Middle East and diminish a bit in the U.S.”

For the Swiss industry, the stakes go beyond sticker prices. Altenburg warned that sustained U.S. weakness could pressure employment and supply chains in watchmaking regions, while forcing brands to rethink distribution, pricing, and even corporate structures to blunt the tariff’s impact.

Bhatt thinks marketing to younger generations will also matter more in a cooling market.

“When the market’s high, they rely just on brand value and brand name,” he said. “When the market is low, they need people to understand the rarity and complexity and difficulty in producing these rare watches.”

All said, the tariff probably won’t kill Gen Z’s fascination with luxury watches, but it could redraw the road map for how and where they buy them.

The social media posts of vintage Daytonas and Nautiluses are unlikely to disappear. What may change is that, for many young Americans, the product may increasingly be secondhand, and possibly stamped by a boutique in Paris or Milan.