Tramp war broke the hopes of luxury to revive 2025

The trade war, Donald Trump, broke the expectations for the recovery that the United States drives in the luxury market this year, threatening the customs tariff to prolong the demand for handbags and high -end watches.

The United States and China, twin engines that work on global demand for luxury goods, have continued to increase import duties against each other’s products in a fever commercial dispute that risk undermining consumer confidence in the two largest economies in the world.

Analysts responded by reducing growth expectations throughout the industry. This week, Bernstein expects that the luxury sector will suffer from a 2 % decrease in revenue in 2025, which reflects its previous prediction by 5 percent due to the increasing economic uncertainty and the increase in the possibility of global recession.

“Our basic issue is now any receipt in luxury that is paid to 2026.”

The visible administration will give the end of this week to postpone technology groups from the increasing American definitions in China, only for the administration to indicate on Sunday that consumer electronics will decrease under a separate system of duties instead, highlighting the difficulties that any sector predicted.

But while Trump can change the path on his introductory plans, the banker said: “A lot of damage has already happened.”

LVMH, whose billionaire billionaire Bernard Arnolt flew to Washington at the end of March to discuss the possible definitions with Trump, one of his acquaintances long ago, the luxury profit season starts on Monday.

Arnault attended in January the opening of Trump and then praised “winds of optimism” sweeping the United States. The luxury businessman said at the time he was thinking about Increase the production of American LVMH.

Barclays expects organic sales in the LVMH fashion and leather goods – a bell of this industry – will fade 1 percent in the first quarter. The group’s sales are expected to be flat for the same period last year.

Bernstein’s analyst Luka Solka stuck to his low estimates for the sector as a whole in 2025, even after Trump announced on Wednesday a temporary stop for a period of 90 days from the “mutual tariff” of countries that showed willingness to re -negotiate trade agreements with the United States.

“Return to the previous numbers, as if what happened was just a bad dream, is not possible. We have material damage in the financial markets and in the economy as a result of wrong policy advertisements.”

He added: “The uncertainty prevails over the upper, and it is usually an excellent background for stagnation.”

After a historical mutation during the epidemic, when consumers boasted about the handbags and advanced alcohol, the luxury was suspended in a state of stagnation at a time when the middle -class shoppers gain in Chinese spending and economy. It is now aggravated by Trump’s trade war.

Trump photographed China, a main market for the luxury sector, for punishment. American definitions on Chinese goods are now 145 percent. In response, China raised the definitions of US imports to 125 percent.

Most luxury goods are made in France and Italy, while high -end watches are made in Switzerland. The United States is exposed to all three countries to a 10 percent tariff, after retracting the high prices imposed at the beginning.

Trump’s trap created chaos on Earth. One of the executives said his company had to change the rates of duty on the shipments that went to the United States three times in less than a week.

He added: “Loss of long -term confidence … and uncertainty is the absolute poison for consumer feelings.”

The same definitions, as they are today, are still more manageable for luxury companies than many others, and the strongest brands have a more time limit to relieving the effect by increasing prices. But in an industry that depends on consumer confidence, deep damage is psychological.

The brutal sale in the global stock markets this year will leave many other shoppers who are bound by their wounds. “If you see what is happening with the stock market, you can (mainly) predict the level of business in our stores,” Chanel Fashion President Bruno Pavlovsky, Chanel Fashion, told the Financial Times last month.

Erwan Ramburg, Managing Director of HSBC, wrote that the risks of luxury lies in a mixture of wealth destruction, the power of consumer spending restricted in the United States and the wide degradation of consumer morale.

“We expect, literally, fewer champagne bottles that appeared this year,” wrote.

HSBC now expects organic sales to decrease by 5 percent this year, compared to its previous expectation that sales will remain fixed compared to 2024.

The bank analysts upgraded most of the luxury shares at the end of last year, with the belief that they would benefit from the United States’s convening in luxurious spending. “This will not be the case in our point of view anymore,” they wrote.

The expectations of “slight growth” in China are the main righteousness, after 2024 painful, also appear increasingly unpredictable.

but, HermesThe group is expected to continue behind the required Berkeen bags yet. Barclays analysts estimate that their sales will increase by 8 percent in the first quarter.

but problems In Gucci, the largest brand in King, the group left very slowly. Barclays expects that Gucci sales will decrease by 25 percent in the first quarter, while Bernstein warns that KERING is now “unlikely to meet its directives to obtain fixed revenues and operating profits in 2025.

Participated in additional reports from Lauren Infik in London and Alex Rogers, Washington