THE AMERICA ONE NEWS
Aug 1, 2025  |  
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Images Le Monde.fr

Luxury goods manufacturers are flying blind. Although the sector now knows its exports will be taxed at 15% upon entry into the United States as of August 1, the entire supply chain is questioning the consequences of these additional costs and the best strategy to avoid undermining their profitability.

As Pierre-François Le Louët, co-president of the French Union of Fashion and Clothing Industries (UFIMH), pointed out, "The United States is a very large market that luxury goods manufacturers and high-end ready-to-wear brands cannot do without." The country alone accounts for around €80 billion of the €363 billion in global luxury goods revenue. France exported nearly 8% of its women's ready-to-wear, 13% of its handbag production, and an equal share of cosmetics to the US in 2024.

The US remains the top priority for French manufacturers, who are facing a global slowdown in the market. Sales of ready-to-wear, cosmetics, and perfumes could fall by 2% to 5% in 2025, according to forecasts from consulting firm Bain & Company published in June.

The sector is counting on US sales specifically to offset slowing consumption in China. In 2024, activity there dropped by roughly 20%, according to Bain & Company, and the start of 2025 has shown few encouraging signs. Tourists have deserted Hainan Island, a territory known for its shopping centers specializing in duty-free goods.

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