Overview

• The U.S. implemented a 20% tariff on luxury goods from the European Union starting April 2, 2025, impacting brands like Hermès, Chanel, Gucci, and Dior.
• Luxury brands are expected to pass the cost of tariffs onto consumers, with price increases of up to 20% projected for high-end items such as handbags and apparel.
• The European Union, which accounts for 70% of the global luxury goods market, is finalizing retaliatory measures including tariffs and regulatory actions against U.S. firms.
• Stock markets have reacted sharply, with significant declines in shares of major fashion companies like LVMH, Kering, and Burberry since the tariff announcement.
• Analysts warn of long-term disruptions to global trade and supply chains, with smaller designers and aspirational consumers likely to bear the brunt of the economic fallout.