Trump’s trade war breaks hopes for the luxury revival of 2025

This year, Donald Trump’s trade war has destroyed the expectations of the USA’s luxury market as tariffs threaten to extend the demand for bags and high -class hours.

The United States and China, twin motors working in world demand for luxurious goods, continue to strengthen the duties of importing the power on TAT on each other’s products into a feverish trade dispute, which greatly undermines consumers’ trust in the two largest economies in the world.

Analysts responded, reducing growth forecasts throughout the industry. This week, Bernstein is predicted that the luxury sector will be affected by 2 percent of revenue decline in 2025, changing pre -forecasting of 5 percent growth because of increased economic uncertainty and increasing the likelihood of global recession.

“Our basic business is any pickup in luxury, which is pushing for 2026,” said one of the industry bankers.

The obvious provision of this weekend to address to technological groups from intensified tariffs in China, only for the administration on Sunday on Sunday, that consumer electronics falls under a separate duty regime, emphasizes the difficulties that predict the hit for any sector.

But while Trump could still change the course to his tariff plans, the banker said: “A lot of harm has already been done.”

LVMH, whose boss boss Bernard Arnol flew to Washington at the end of March to discuss potential tariffs with Trump, a long-standing acquaintance on Monday will start in the luxury income season.

In January, Arno took part in the inauguration of Trump and later said a “wind of optimism”, which was swept through the United States. Luxury tycoon said at a time when he considered the issue Increase LVMH production in the USA.

Barclays expects organic sales in the main fashion and leather LVMH leather – bell for the industry – will decrease by 1 percent in the first quarter. The group’s sales are expected to be equal compared to the same period last year.

Bernstein Luke Solka analyst was stuck on the reduced sector estimates as a whole in 2025, even after Trump announced a 90-day pause on his “mutual tariffs” for countries that showed a willingness to talk to trade treaties with the United States.

“Return to previous numbers, as if it had happened, was just a bad dream.

“The uncertainty prevails in the supreme, which is usually a great background for recession,” he added.

After the historic boom during the pandemic, when consumers made their way to high -end and alcohol bags, luxury was delayed when the middle -class buyers are kept in the costs and economy of China. This is now deteriorating Trump’s trade war.

Trump nominated China, the key market of the luxury sector, for punishment. US tariffs for Chinese goods are now 145 percent. In response, China has raised US import tariffs up to 125 percent.

Most luxury goods are produced in France and Italy, and high -class hours are made in Switzerland. The US is subjected to all three countries with 10 percent tariffs after returning to the higher rates that it initially imposed.

The Zanarast Trump created chaos on the ground. One executives said his company had to change the stakes on supplies who headed three times less than a week.

“The loss of trust is long … And uncertainty is absolute poison for consumer mood,” he added.

The tariffs themselves, as they stand today, are still more managed for luxury companies than many other, and stronger brands have a more free opportunity to mitigate the impact by rising prices. But in the industry, which depends on the confidence of consumers, deeper damage is psychological.

Brutters sale in the global stock markets this year will leave many luxury buyers who are with wounds. “If you look at what’s going on with the stock market, you can (mostly) predict the business level in our boutiques,” said Bruno Pavlovsky, President Fashion in Chanel, last month Financial Times.

Ramburg, HSBC director, wrote that luxury risks are in conjunction with the destruction of wealth, limited consumer spending in the US and widespread in consumer mood.

“We expect that this year this year there will be less than champagne bottles,” he wrote.

Now HSBC expects that organic sales will fall by 5 percent this year, compared to the previous expectations that sales will remain equal compared to 2024.

Bank analysts have upgraded most luxury shares by the end of last year, making sure they would benefit from the American lift. “It will no longer be in our view,” they wrote.

The expectations of “slight growth” in the mainland China after the agonizing 2024 also looks increasingly unlikely.

However, GermesIt is expected that the group, which is behind the very popular Birkin bags will continue to surpass. Barclays analysts estimate that its first quarter sales will grow by 8 percent.

But problem The Gucci, the largest Kering brand, left a group that was strongly exposed to any downturn. Barclays expects Gucci sales in the first quarter to fall by 25 percent, while Bernstein warns that Caring is now “unlikely” to fulfill its flat -income recommendations and exploitation in 2025.

Additional report Lauren Indian in London and Alex Rogers in Washington