“Actions of European companies from the luxury goods sector fall on Friday after US President Donald Trump threatened that from June 1 he would introduce 50 % duties on goods from the European Union” – writes Reuters.
See also: But trade war? American duties to the Union are to be higher than China
The agency indicates that the European luxury industry, which produces, among others, bags, shoes, fashion articles and expensive alcohol, is largely dependent on the American market, which was seen as the main drive motor for problems with demand in China.
A negative response to the words of Donald Trump can be seen on the stock exchanges. LVMH shares-the largest French companies listed on the stock exchange in terms of market capitalization, were overestimated by 3-4 percent.
“The largest groups in the luxury goods sector sell about a quarter of their products to American consumers, while the exhibition among smaller brands is varied, from 14 percent in the case of Moncler producing clothing, up to 46 percent in the case of a producer of Sandals Birkenstock,” says Reuters.
The agency also cites the opinions of S&P analysts who mentioned The luxury sector in a recent note as one of the most vulnerable to the American dutiesbecause companies have limited ability to transfer production to the United States.
“If you want to create a factory in the USA to overcome the problem of customs duties, it is now simply impossible. You don't have people, know-how, “said partner Bain Claudia d'Arpizio during the Thursday industry event.
Louis Vuitton, which belongs to LVMH, is the only European luxury brand producing locally in the United States, although it is struggling with problems in one of its plants in this country.
European manufacturers of luxury goods, including the producer of Birkin Hermes handbags, said that they can use their “price power” to balance the costs of all duties, but analysts say that some brands may have limited prices of price raising.
