Hold your handbags… The United States is about to hit our precious French luxury imports with a 25% tariff. The tariff will be applicable on all luxury imports including wine, cheese, designer clothing, accessories and cosmetics.
The proposed tariff is scheduled to take effect January 6, 2021, as retaliation against French digital taxes on American technology companies like Apple, Google and Facebook. As you may recall, the United States has been threatening to impose these tariffs since 2019 but delayed enforcement to give the countries time to try to work things out (read: US Tariff Threat Looms Over Hermès and Chanel Bags).
Now, according to the Wall Street Journal, there’s been no resolution and France has in fact resumed collecting the digital tax!
So what does this mean for us? Well, unless something changes, expect an extra 25% tacked on to the price of your favorite French brands very soon!
In theory, Hermes, Chanel, Louis Vuitton and Dior, to name a few, could reduce their U.S. prices to blunt the effect but really… how likely is that?
Moreover, it has been reported that pending investigations, similar tariffs could be implemented on imports from UK, Italy, India and Spain too!
Fingers crossed the member nations of the OECD and the USA can work things out. There’s still a week to go… but it might not be a bad idea to get that last minute handbag crossed off your wishlist this week!