By John Meyer, consultant in business – Eurasia Business News, January 19, 2025. Article no. 1993
European luxury shares dropped notably after President Trump’s new tariff threat, as investors worried about weaker U.S. demand for high-end goods and renewed U.S.–EU trade tensions. The selloff hit many major brands across France, Italy, Switzerland and the U.K., with luxury indices underperforming the broader European market.
LVMH shares fell around 4% in early European trading, while peers Kering and Hermès lost roughly 3% each.
Hermès had explicitly chosen to pass tariffs on to wealthy U.S. clients via price increases in April 2025, signaling that its exceptionally strong brand allows it to protect margins more than many peers, though this risks pushing some purchases to Europe or other markets.
Swiss luxury groups Richemont and Swatch slid between about 2% and 3.7%, and Italian names such as Moncler and Brunello Cucinelli dropped roughly 2%–2.5%. The United States is one of their most important markets and Swiss-made watches are directly targeted. Recent and earlier tariff shocks have already caused noticeable swings in their share prices and forced pricing and strategic adjustments.
Why tariffs hit luxury hardest
Trump threatened a 10% tariff on imports from several European countries starting next month, specifically including France, where many top luxury houses are based.
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Luxury brands rely heavily on U.S. consumers and cross‑border shopping, so higher import duties and trade uncertainty directly threaten sales and profit margins.
Broader market reaction
European stock benchmarks such as the Stoxx 600, FTSE 100, CAC 40 and DAX all opened lower on the tariff headlines, with banks, autos and luxury leading the declines.
Defensive assets gained, with moves into gold and safe‑haven currencies reflecting a risk‑off shift as investors reassessed the odds of a new transatlantic trade dispute.
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© Copyright 2025 – Eurasia Business News. Article no. 1993
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