What tariffs on four luxury groups might contribute to US coffers
Luxury leathergoods groups in Europe will have breathed a collective sigh of relief on learning, on April 9, of a 90-day pause on President Trump’s tariff of 20% on imports from the European Union to the US.
For 90 days, while negotiations continue on new trade deals between the US and all of its global trading partners, most products entering the US market from the European Union will carry a tariff of 10%.
Halving the rates, at least for three months, is good news for LVMH, Kering, Hermès, Chanel and others because there is no doubting the importance of the US market to each of them.
LVMH reported full-year revenues of €84.7 billion for 2024, with €41 billion coming from its leathergoods and fashion division.
It said 25% of revenues overall and 17% of its sales revenues in leathergoods and fashion had come from the US. Across all of its brands, LVMH had almost 1,200 stores in the US at the end of the year, stocking mostly products imported from France, Italy, Spain and other parts of Europe.
At Kering, the full-year revenue figure for 2024 was €17.2 billion. Grouping all of North America together, it said 24% of its revenues last year came from that market.
Growth at Hermès took its results for 2024 to revenues of €15.2 billion. It gave a figure of more than €2.8 billion for the Americas as a whole, 18.4% of the total.
It is usually late May these days before Chanel reports its annual results, so 2024 figures are not available yet. In 2023, the group achieved revenues of $19.7 billion. It, too, reports the Americas as a whole, attributing just under $4 billion of its revenues in 2023 to sales in this market, 20% of the total.
Making some adjustments for the different currencies and geographies involved in these groups’ reports, we can make an educated guess at combined revenues of around €30 billion in the US.
At a 10% tariff rate, imports from these four alone would contribute around €3 billion per year to US government coffers. If the tariff rate were to go back to 20%, the figure would be €6 billion.
Image: Chanel.
