Are your favorite designer bags European imports? If so, you may soon be hit with price hikes as significant as 20% on top of the already expensive cost. U.S. President Trump announced on April 2, 2025, that the United States is imposing new tariffs on countries he claims to have unfair trade practices. For the EU, the announced tariff is 20%, effective at midnight on April 3rd.
Image courtesy: @shamswomoon
Brands like Hermès, Chanel, and Louis Vuitton are not just based in France, but station most of their production in the home country. The same applies to handbags produced in Italy (e.g. Fendi, Bottega Veneta, Celine), Spain (e.g. Loewe), and other EU countries.
Absent a change or special agreement, when EU luxury houses ship handbags for sale to the US, a charge (tariff) equal to 20% of the declared value will be imposed. Assuming the declared value is the sale price in the US, that could effectively add about 20% to the cost of the item.
So, who will be paying that extra amount? Well, we know from Hermès’ CEO Axel Dumas, that Hermès is likely to pass that additional charge on to US customers, whom he believes will understand and be willing to pay. Or, as he said when announcing 2024 financial results, perhaps Americans will head to Paris for Hermès shopping.
Read also: Hermès Revenues Up 15% in 2024 With Leather Goods Division Continuing to Surge
Image courtesy: @cocomeetshermes
There’s no reason to believe Louis Vuitton would not do the same. However, Louis Vuitton occupies a slightly different space, as it has production facilities in the United States: two in California and one in Texas. Arnault may also be interested in moving more production stateside, as he has expressed dismay at French business taxes and that his business enterprises is welcomed in the United States. Whether he would do the same for any of the many brands housed under the LVMH umbrella remains to be seen.
Read also: LVMH Beats 2024 Financial Expectations And Confident for 2025
Image courtesy: @thebirkinboy
Hermès, on the other hand, prides itself on its commitment to French production and craft, and all of its leather workshops are in France. While not all Chanel handbags are made in France, they are created in EU countries, also subject to the new tariffs. There’s also the question of whether American would desire Hermès or Chanel handbags made in the United States.
No doubt the entire luxury fashion industry is concerned about the impact of these US tariffs. The days of booming luxury purchasing have slowed for many brands, given the geopolitical instability and economic uncertainty of the last few years. Interestingly, though, the US consumer has fared better than many others, according to luxury house financial reports.
Image courtesy: WWD
An additional 20% or so added to the price of these handbags is substantial and could deter US luxury clientele. If brands pass on tariff costs, a Chanel 11.12 handbag, currently priced at $10,800, could be up-priced by $2160. Similarly, the Hermès’ Birkin 25 in Togo price, which was $12,100, could rise to $14,500. Or anything in between.
Alternatively, could there be another summer of shopping in Europe for Americans, as they try to get a luxury deal? Unless, of course, the EU raises its prices at home.
What do you think? And are you ready, able, and willing to handle increased prices due to US tariffs?
Updated: April 4th, 2025
Comments
4 Responses to “How High Will Trump Tariffs Spike Prices of Luxury Handbags?”
When Chanel, or Hermes ( lately ) increase their prices up to 30% every year , twice a year, for the past 15 years – nobody screams about it. But now, it’s such a big deal???
If you can’t afford it, then don’t buy it! Simple as that.
We’re pretty much putting all major purchases on hold until we see how this plays out. Given economic history, we’re likely heading for a recession or worse.
In addition to the tariffs, the dollar is tanking against the Euro, so the bags will also cost more in Europe since the dollar is worth less.