Hermès is raising the prices of its handbags and scarves in the United States starting May 1, blaming the decision on President Donald Trump’s tariffs on Chinese goods, according to CNBC. The company’s finance chief Eric du Halgouët confirmed the hike during an analyst call on Thursday, saying the increase only affects American shoppers. There will be no price changes in Europe or Asia. The tariffs triggering this are the 10% universal duties imposed by the White House in early April. Eric said, “The price increase that we’re going to implement will be just for the U.S. since it’s aimed at offsetting the tariffs that only apply to the American market, so there won’t be price increases in the other regions.” That means people in New York and Los Angeles will pay more for the same Birkin bags that someone in Paris or Tokyo can buy at the old rate. The move comes as the luxury brand tries to fully absorb the financial blow caused by Washington’s new import duties. The new 10% tariff is already affecting a broad range of goods—electronics, clothing, vehicles, and even real estate. So it’s no surprise that luxury items like handbags and scarves are getting pulled into the mess too. And unlike the European Union, which got a 90-day delay to negotiate better trade terms, the U.S. got hit with the full cost immediately. That’s why Hermès is acting now. Hermès slows down while LVMH stumbles Sales for Hermès in the Americas grew 11% in the first quarter, bringing in about 17% of the company’s total revenue from January to March. But the full global growth came in at only 7%, missing the expected range of 8% to 9%, as noted by Deutsche Bank analysts. In comparison, the company’s Q4 2024 growth had hit 17.6%, showing a clear slowdown. Deutsche Bank still called the results “robust,” but said weak spots showed up in watches and perfume. Citi wasn’t too harsh either, describing it as “a respectable outcome.” But despite those labels, the stock still dropped. On Thursday morning, Hermès shares fell 1.3%, which put the company’s market value at €244.5 billion ($278.2 billion). That number put it just below LVMH, which stood at €245.7 billion. Even though Hermès now rivals LVMH in market size, their actual revenue gap is massive. LVMH, owned by the Arnault family, runs brands like Louis Vuitton, Dior, Moët Hennessy, Tiffany, and Sephora. They’ve got reach across alcohol, fashion, and beauty, while Hermès remains more narrowly focused. And a decade ago, LVMH even tried to buy out Hermès, but failed. Now both companies are facing headwinds. LVMH reported a surprise drop in sales for Q1, especially in its top-earning fashion and leather goods segment. It’s one of the rare times both giants are slipping at the same time. Some analysts think luxury firms like Hermès and LVMH can survive these kinds of price shifts better than regular stores. That’s because they sell to rich customers who don’t really flinch at higher costs. But there’s a catch. If global economic growth drops or recession fears rise, even the high rollers might start cutting back. Meanwhile, Chinese manufacturers are trying to fight back. This week, a wave of Chinese suppliers flooded U.S. social media with videos telling Americans to skip retailers entirely. One TikTok user named Wang Sen, who claims to be an original equipment manufacturer (OEM) for top brands, posted clips standing in front of a wall of Birkin bags. He was basically telling Americans to bypass Hermès, buy directly from the Chinese factory, and dodge Trump’s 245% tariffs on China. Meanwhile, DHgate, a Chinese wholesale platform known for selling fake luxury items, suddenly jumped to #2 on the U.S. Apple App Store. Another Chinese app, Taobao, climbed to #7. These platforms let Americans buy replicas at a fraction of the cost—most even claim to get the exact same quality. Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More
