Augustin Uhel, MSc student in Luxury Management and Guest Experience at Glion Institute of Higher Education., writes on LinkedIn: The luxury sector faces new challenges if Trump returns to power, as his past trade policies could resurface. Tariffs on imports from Europe, potentially reaching 20%, may impact key players like LVMH, Kering, and Richemont. This could particularly affect the U.S. market, which represented about 32% of LVMH’s global revenue in 2023.

The industry also contends with a slowing Chinese market, where sales fell by 18% in recent periods, impacted by economic deceleration and rising “luxury shame.” A strained U.S.-China trade relationship under Trump could worsen this trend, reducing sales in both regions.

On the upside, European luxury exports could benefit from a weaker euro, balancing some of the tariff impacts. Additionally, brands like Hermès and Rolex have consistently demonstrated pricing power, with the ability to raise prices by 5-6% annually without losing consumer interest. This resilience, combined with the strong brand loyalty of affluent American consumers, could mitigate some risks.