What Will Happen to the Handbags?
The New York Times
As tariffs on the European Union take effect, luxury goods makers are “biting their nails” over their treasured “Made in France” or “Made in Italy” products.
A mere month ago, luxury businesses were looking forward to a new era of deregulation, lower taxes and a booming stock market — and dreaming of well-heeled buyers splurging on opulent ball gowns and statement watches.
Instead, as the Trump administration imposes 20 percent tariffs on products from the European Union, they are bracing for a different reality. One that may mean a U.S. market with fewer quilted Chanel bags, more expensive Rolexes and uncertainty about the price tags attached to “Made in Italy,” “Made in France” and “Made in Switzerland” for American consumers. The same consumers who, last year, were responsible for 24 percent of the total $1.62 trillion global luxury spend, according to Bain & Company.
“The U.S. was supposed to be the savior of the luxury goods industry,” said Euan Rellie, co-founder of the investment bank BDA, which works in the fashion industry. “The Trump administration has said overnight, ‘We’re not going to play ball.’ Luxury is in a very tough spot.”
It was already challenged, hurt by the slowdown of luxury sales in China, a recession in Germany and an aging Japanese population. Now, with the huge U.S. market facing uncertainty, no brands seemed in the mood to discuss how tariffs might affect their businesses or the prices of their products.
A spokesman for LVMH, the largest luxury group in the world, with over 75 brands including Dior, Louis Vuitton and Fendi, declined to comment — even though the United States accounted for 25 percent of the group’s revenue in 2024, and Vuitton is the sole European luxury brand to have factories in the United States. (President Trump cut the ribbon at a Vuitton factory in Texas during his first term, and the LVMH chief executive, Bernard Arnault, attended the recent Trump inauguration with two of his children.)
Burberry declined to comment, as did Chanel. There were no comments from Hermès, Kering (owner of Gucci, Balenciaga and Saint Laurent, among other brands) and Puig (Carolina Herrera, Rabanne and Dries Van Noten). Coach and Tory Burch, too, preferred to stay mum.
