April 10, 2025

Europe’s beloved luxury brands may be largely sheltered from the initial effects of sweeping U.S. tariffs, but the risks of a wider economic downturn spell bad news for the sector’s long-awaited recovery.

Shares of European luxury stocks LVMH, Richemont, Kering and Hermes were among those to slip lower Wednesday as levies on U.S. imports from the European Union took hold. The outlook remains unclear, even as President Trump later announced a 90 day pause and reduced rates to 10% universal tariffs.

High-end fashion houses — for whom the made-in-Europe label is part of the allure — are less likely than other firms to bow to President Donald Trump’s ultimate demand to relocate manufacturing to the U.S., instead indicating that they will pass on increased import costs to consumers.

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