Tariffs squeeze European luxury
An analysis argues U.S. tariffs are starting to hit European luxury groups — naming LVMH, Kering and Richemont — just as U.S. consumers had become the sector’s last major growth engine. The piece frames tariffs as a potential pressure point for pricing, demand and inventory strategies at flagship houses. (europeanbusinessmagazine.com)
European luxury groups are bracing for higher United States import costs just as American shoppers have become one of their few reliable growth markets. (whitehouse.gov) On April 2, 2025, President Donald Trump ordered a 10 percent baseline tariff on most imports and set a higher European Union rate that the European Commission said was later paused for 90 days on April 9, leaving the 10 percent duty in force during talks. (whitehouse.gov; ec.europa.eu) The pressure lands on companies with deep exposure to the United States. LVMH reported 80.8 billion euros in 2025 revenue, and European Business Magazine said North America accounts for about 17 billion euros, or roughly one quarter of sales. (lvmh.com; europeanbusinessmagazine.com) Kering entered 2026 in weaker shape than LVMH. The group reported 14.675 billion euros in 2025 revenue, down 13 percent as reported, while Gucci’s 2025 revenue fell to 6 billion euros and North America was described as broadly in line with the prior quarter in the fourth quarter. (kering.com; kering.com) Richemont has been more resilient, helped by Cartier and Van Cleef & Arpels. For the year ended March 31, 2025, Richemont posted 21.4 billion euros in sales, up 4 percent, with double-digit growth in every region except Asia Pacific. (richemont.com) That regional mix matters because China has not returned to being the sector’s easy answer. European Business Magazine said Chinese demand remains below its 2021 peak, while LVMH said the first half of 2025 was supported by solid local demand in Europe and the United States. (europeanbusinessmagazine.com; lvmh.com) Luxury groups have only a few ways to handle a tariff: raise United States prices, accept lower margins, or shift more production and inventory closer to American buyers. European Business Magazine said those choices are now central for LVMH, Kering and Richemont because discounting risks damaging brand positioning. (europeanbusinessmagazine.com) Analysts have also pointed to a second-order risk: shoppers may change where they buy. S and P Global said some United States luxury consumers could travel to Europe for tariff-free purchases if price gaps widen. (spglobal.com) The trade fight is still moving. The European Commission said it paused planned countermeasures for 90 days from April 14, 2026, to leave room for negotiations with Washington. (ec.europa.eu) For Europe’s biggest luxury houses, the United States had become the market that could offset weaker demand elsewhere. A tariff that starts at 10 percent turns that advantage into a pricing test they cannot ignore. (whitehouse.gov; europeanbusinessmagazine.com)
