The tariffs have cut their wings before taking off

The luxury articles industry faces a difficult crossroads before the new tariff policies imposed by the US. Although Trump has given a small 90 -day respite To the world economy, the imposition of tariffs up to 20% To European productsis a hard blow to fashion brands, watchmaking and high -end accessories.

The luxury sector not only face an inevitable increase in the price of their products, but also puts on the table the future of the labels “Made in Italy” or “Swiss Made” that some of the more expensive and exclusive products as a synonym for design and quality.

The luxury industry against tariffs. Europe has been the epicenter of fashion and world luxury for decades. Great brands such as Louis Vuitton, Hermès, Cartier, Chanel, Rolex or Phillipe Pattek thrive thanks to a balance between artisanal tradition and global strategies. However, the scenario has changed dramatically after commercial war drums of the United States.

It is estimated that tariffs between 10% and 20% for certain luxury articles manufactured in Europe and the United Kingdom could raise the final cost for the consumer in a market that represents 24% of the total world expenditure on luxury, according to data from data from Bain & Company.

Switzerland does not move. The question is even more serious for the watch industry. US has imposed a 31% tariff to Switzerland That, we remember, it does not belong to the EU. At the moment, the Swiss Executive position is not taking reciprocal tariff measures as is doing the rest of Europe, despite Be outraged with a policy that they consider unfair to the Helvetic country.

Outstanding brands such as Rolex, Patek Philippe or Tag Heuer are among the most exposed to these increases since their manufacture is made in form exclusive in their workshops in Switzerland and do not consider taking part of the production to the US. Despite this panorama, the Swiss watch industry It is optimistic. They ensure that their main audience, composed of buyers of high purchasing power, will continue paying high pricesand consider that, for them, an extra cost of 31% is a minor inconvenience.

Migrar is not on the road map. Given this new context, it could be thought that European luxury brands should consider moving their production to the US, as the automobile industry is being raised, to avoid tariffs. However, no fashion brand and luxury products have expressed its intention to abandon its current production centers. “In each conversation that I have had with customers during the last five to ten days, not even one person talked about building a factory in the United States,” assuredto The New York Times William Susman, managing director of the Investment Bank Cascadia Capital.

Signatures like Victorinox, emblematic manufacturer Multipurpose knifeThey have made it clear that artisanal quality is inseparable from their identity and that any change in the location of production would compromise its essence. “This Swiss icon is inextricably linked to the quality promise ‘Swiss Made’. We will remain firm in it,” He sentencedCarl Elsener Jr., Executive Director of Victorinox to New York Times.

The only exception is the Louis Vuitton Moët Hennessy (LVMH) group, Bernard Arnault’s holding company, which in addition to having American brands such as Tiffany & Co, It has several factories In California and Texas, that opened Donald Trump himself in his first term. However, that would only free him from the cost of tariffs, since when importing high quality skins and fabrics from Europe and other regions, they would also be affected by reciprocal tariffs.

The aspirational client: the great loss for luxury. Such and As they pointed out from Reutersthe US market represents between 20% and 30% of the sales of large fashion groups, cosmetics and luxury accessories such as LVMH, Keing, Richemont or Hermès. That percentage not only supplies millionaires who can pay it comfortably. There is also an important percentage of aspirational customer that, perhaps, is willing to pay $ 2,000 for a bag, but will think about it if that same product costs $ 2,400.

“A 20% tariff on European luxury goods could depress luxury sales in the United States, especially for companies such as Burberry and Kering that focus more on a wealthy aspirational clientele than on ultra -up clients,” said the analysts of the Morningstar consultant in statements to Reuters.

Another door that closes. The commercial war initiated by the US arrives at a time when, like The luxury cars sectorthe high -end products industry sought to recover from the fall in sales experienced in the Chinese market in 2024. Now, to lower their sales expectations in the US represents a hard blow, especially when the main brands in the sector had already opened new stores in the US, such and as they highlight in Business of Fashion.

According to sector analysts, brands should rise between 4% and 6% their prices to mitigate the increase in costs. TO Tenor of the published by Business of Fashion Citing Barclays sources, a negative impact of 1.5% for the Fashion Division and LVMH leather articles and 2.4% for Prada and Hermès is expected.

The dependence of the aspirational client would leave more exposed to companies such as Keing (Gucci, Balenciaga, Yves Saint Laurent, etc.) could suffer a fall of 8.7%, while the Swiss watches manufacturer Richemont (Cartier, Piaget, Baume & Mercier, Vacheron Constantin, etc.) could experience a 7.1%drop. All this, when sector forecasts They gave a growth of up to 3% for this year.

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Image | Flickr (Trump White House Archced)