Europe's luxury exporters to be hit by new proposed US tariffs
THE US can legally impose tariffs on an array of European exports in retaliation for Europe's government aid to Airbus SE, according to a panel of three World Trade Organisation arbiters
THE US can legally impose tariffs on an array of European exports in retaliation for Europe's government aid to Airbus SE, according to a panel of three World Trade Organisation arbiters.
This could lead to the US imposing new duties on a range of goods worth US$5 billion to $7 billion per annum, while US President Donald Trump has threatened tariffs on $11 billion, reported Bloomberg.
The US has identified possible targets - with tariffs potentially as high as 100 per cent - on a list of goods with a total export value of $25 billion a year. Though the most valuable goods on the US list are exports of European aircraft and parts, the tariffs could also hit products made by Europe's leading high-end brands.
LVMH is particularly exposed to the proposed US levies, which target two of its primary product lines - wine and spirits like Dom Perignon, Moet & Chandon and Hennessy - and leather goods under labels such as Donna Karan, Givenchy, Kenzo and Louis Vuitton.
The US market for luxury goods is among the top destinations for European companies like LVMH where the US made up one quarter of its total global sales in 2018. American consumers purchased EUR11.2 billion (US$12.4 billion) worth of goods from LVMH in 2018, according to Bloomberg data.
New tariffs will raise costs that will most likely be passed on to US consumers, said CFO Luca Marotta of Paris-Based Remy Cointreau, the company that produces Remy Martin cognac, Cointreau, Passoa and Mount Gay rum.
European beverage producers are already reeling from the uncertainty stemming from US President Donald Trump's repeated threats to impose tariffs on wine, liquor and other alcohol.