How will LVMH and its luxury competitors cope with tariffs?
You would think the type of shopper who can afford a Tag Heuer watch or a Hermès Birkin bag, costing tens of thousands of pounds, would largely be immune from macroeconomic turbulence. But their longstanding resilience, including during the pandemic, is now being tested.
The $350 billion global luxury market is facing challenges as geopolitical instability and tariffs introduced by President Trump shake investors' confidence and sap consumers' appetite in two of its most crucial regions: China and the United States.
Trump has imposed a 145 per cent tariff on Chinese imports to the US, provoking immediate retaliation from Beijing, which hit back with a 125 per cent tariff on American goods. Although Trump's measures were paused for 90 days, the shock has already rippled
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