The tariff measures announced this week by the US President Donald Trump could also complicate the production of luxury goods. What are the owners of the most ostentatious brands that could suffer a setback for the new US policy.
“The new import tariffs are worse of what had been anticipated and represented an important obstacle For the sector, which generates 20-25% of sales on average in the US, it exports entirely from Europe, it has no flexibility to transfer part of its production capacity to North America and its price setting power is increasingly questioned, “said the JPMorgan Chiara Battistini analyst.
Luxury brands that could be beaten by Donald Trump’s tariffs
Trump’s tariffs put in check the vision of profits from almost all sectors. Its base of 10% will enter into force on April 5 and the 9 will govern a higher tariff type for some 60 countries that the administration considers the worst commercial offenders.
Europe, where many luxury products giants such as LVMH (MC.PA), Kering (Ker.PA) and Burberry (Brby.L) They manufacture their products, it was beaten with a 20%tariff. He ETF Kraneshares Global Luxury Index (KLXY) It fell 10 % last week, a fall worse than the index MSCI Europewhich fell 4 %.
Specialists indicate greater chances of a recession in the United States, with a possible demand contraction even among high -income consumers. “Beyond the pressure on short -term margins, We are even more aware that the impact of tariffs will probably also translate into an obstacle to the underlying demandboth in the short term (due to a higher level of uncertainty and volatility of the stock market, which generally affect consumer confidence) and in the medium term (due to the probable increase in inflation), “Battistini wrote.
JPMorgan’s research shows that luxury goods manufacturers have already applied increases in their prices to compensate for the planned costs of tariffs. The Hug Bag of Ferragamo (Sfer.VI) increased by 4% and that of its elastic dancers by 6% both in the United Kingdom as in France During the last week.
The Hug bag is now sold for US $ 3,100, while elastic dancers reach US $ 695. The company also increased the price of elastic dancers in China (3%) and Japan (8%) days ago, according to a study of JPMorgan.
“The aspirational consumer will be in hibernation as the impact of planned layoffs begins to feel of the February/March Challenger job cuts report, “explained the investment director of Thematic Research, Chris Versace.
JPMorgan Battistini warns that Swiss watches manufacturers could be strongly affected due to a possible demand fall and a market dynamic already competitive. Versace said: “Those costs in the United States will increase significantly; too much for a Rolex New, despite all the new models that have just presented. “
Why did Donald Trump leave Russia out of the new tariffs?
While Trump hardens His commercial war with new tariffs to dozens of countries, a great absent in the list of sanctioned is Russia. Although the White House argues that existing sanctions have already drastically reduced bilateral trade, the decision generates doubts about its true motivations.
The Secretary of the Treasury, Scott Besent, justified the measure stating that the commercial exchange between the United States and Russia “has practically stopped” since the sanctions imposed by the invasion of Ukraine in 2022. However, according to official data, in 2024 Russia exported goods for about US $ 3,000 million to the US, including fertilizers and platinumwhich places it above other countries that were achieved by tariffs, such as Laos and Fiyi.
Source: Ambito
