How Tariffs on $7.5B Worth of European Goods Will Affect Luxury Fashion Brands

Amid its prolonged trade war with China, the United States is now embroiled in a tariff dispute with the European Union — set to impact some of the world’s most renowned luxury fashion brands.

Following approval from the World Trade Organization on Wednesday, Washington has imposed duties on $7.5 billion worth of European goods, including 25% on British-made apparel and accessories as well as a variety of food and beverages hailing from other European countries.

The levies — which the Office of the U.S. Trade Representative said would go into effect on Oct. 18 — will hit a variety of fashion products, including women’s outerwear and swimwear as well as men’s suits imported from the United Kingdom. (The U.S. had threatened to slap tariffs on clothing from other European countries, which did not make the USTR’s final list.)

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Among those to bear the brunt of the tariffs are luxury conglomerates: LVMH Moët Hennessy Louis Vuitton, for instance, houses a mix of wine and spirits brands — such as the France-based Château Cheval Blanc and Moët & Chandon — as well as fashion labels based in the U.K. like Nicholas Kirkwood. Rival Kering, meanwhile, owns Alexander McQueen, which is headquartered in London.

The duties could subsequently affect American department stores that sell such luxury fashion products, including Nordstrom, Macy’s, Neiman Marcus and Saks Fifth Avenue.

The move marks the biggest trade action against the EU since last year’s steel and aluminum duties, which President Donald Trump asserted would provide protection for American industrial workers. On Wednesday, the WTO also gave the U.S. the go-ahead to implement tariffs as high as 100%.

“For years, Europe has been providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers. Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU’s illegal subsidies,” U.S. Trade Representative Robert Lighthizer said in statement. “We expect to enter into negotiations with the European Union aimed at resolving this issue in a way that will benefit American workers.”

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