The uncertainty surrounding US tariffs isn’t over. Is the 15% tariff agreed between the US and the EU an additional one or not? And are luxury brands capable of raising prices further to offset the tariffs? Weak consumer demand is testing their purchasing power. The latest studies and analysts’ scenarios reveal the pricing challenge facing brands. By La Conceria.

The hypotheses

UBS estimates that a 15% tariff on exports to the US could be offset by an average 2% increase in sales prices for luxury brands. Or a 1% increase globally if they want to maintain a balance in harmonizing prices across regions. If prices were not increased, their earnings would be impacted by around 3%. What will brands do in a period of slowing consumption, given that wealthy customers are resisting increases and many luxury products are already unaffordable for aspirational consumers?

The price challenge

It’s no coincidence that prices have risen less in 2025 than in the past. According to UBS, the price of luxury goods increased by an average of 3% between January and May 2025, a significantly lower percentage than the peak of 8% recorded in 2022. In the Financial Times, Claudia D’Arpizio of Bain calls this cautious increase a “clear shift in strategy.” She adds: “A more measured approach to pricing represents an effort to defend volumes while building resilience against imminent risks, such as possible customs duties.” Jacques Roizen, CEO of Digital Luxury Group for China, told Reuters: “Brands re proceeding carefully with further price increases to avoid alienating younger, more casual shoppers.”

Limited room for maneuver

Some high-end brands claim to be able to raise prices to offset the tariffs, but analysts and industry professionals warn that some of them have very limited room to maneuver after past increases. In short, those who have already increased prices now have less of an opportunity than those who have been more cautious. “The brands that have made mistakes in their price balance are the ones struggling the most today,” says Flavio Cereda of Gam Luxury Brands.

The issues surrounding tariffs

Despite the agreement between the US and the EU, uncertainty isn’t entirely over. In fact, it’s still unclear whether the 15% tariff is additional to existing ones. EU President Ursula von der Leyen has stated that the 15% tariff is not additional, according to a CNBC report. It would be great news for European footwear brands if Trump confirmed this. According to Paulo Goncalves, communications manager for Apiccaps, the Portuguese association of footwear, components, and leather goods manufacturers, the average tariff for Portuguese shoes exported to the US in 2024 was 10%. Therefore, if the increase is only 5 percentage points, “the agreement can be considered positive for the sector,” writes Footwear News.