Hermes to raise US prices to counter Trump’s 10 percent tariffs

French luxury brand Hermes plans May 1 price hike to offset US import tariffs.

A view of the window display at an Hermès luxury boutique in Paris, France, on October 22, 2024. Photo by Benjamin Girette/Bloomberg

By Anna Fadiah and Hayu Andini

French luxury brand Hermes has announced it will raise its prices in the United States starting May 1, aiming to fully counter the financial blow from the 10 percent import tariffs recently imposed by President Donald Trump. The move by Hermes to raise US prices reflects the broader challenges international brands face in adapting to new trade policies, particularly in luxury markets where perception and pricing power are crucial.

During a quarterly earnings presentation on Thursday, Hermes finance chief Eric Halgouet confirmed that the company is finalizing a "complementary price increase" for the U.S. market. He explained that this strategic adjustment is designed to completely neutralize the effect of the new import duties.

"It will be a complementary price increase that we are currently finalising, but which will allow us to neutralise this impact," Halgouet told reporters.

He did not specify the exact rate of the increase, but emphasized that the measure will ensure the brand absorbs none of the tariff burden itself. For a company that rarely deviates from its once-a-year global price increase schedule, this U.S.-specific adjustment is a clear sign of how seriously Hermes is taking the recent policy shift.

Strategic pricing in the face of protectionism

Hermes, known globally for its coveted Birkin handbags, fine leather accessories, and signature silk scarves, had already announced a general price increase of 6 to 7 percent worldwide earlier in 2025. But the company’s decision to implement a separate increase for the United States shows the unique pressures of the American luxury retail landscape.

The newly introduced tariffs by President Trump apply a 10 percent duty on a wide range of imports, including luxury goods. Though the administration delayed the implementation of some higher tariffs—such as a 20 percent duty on European Union products—brands like Hermes are already preparing for the financial implications.

By moving quickly to raise its prices, Hermes demonstrates confidence in the strength of its U.S. brand image. The company’s loyal customer base in the U.S. has historically been less sensitive to price hikes, especially when associated with limited-supply, high-prestige items.

Despite the tariff concerns, Hermes had a strong start to the year. The company reported global sales of €4.1 billion ($4.7 billion) in the first quarter of 2025, marking an 8.5 percent increase compared to the same period in 2024. Sales in the Americas were particularly robust, rising by 13.3 percent to €695 million.

Eric Halgouet attributed this growth to double-digit increases across the United States, Canada, Mexico, and Brazil. Even with logistical disruptions—such as wildfires in Los Angeles that temporarily shut down two Hermes stores and snowstorms that affected other U.S. states—the brand posted strong regional figures.

“We saw excellent momentum in the Americas, with strong resilience despite short-term disruptions,” Halgouet said.

This resilience bodes well for the success of Hermes’ planned U.S. price increase. The brand is clearly betting that its affluent clientele will accept, or even expect, the new prices, particularly if the increase is tied to maintaining quality and exclusivity rather than profit padding.

Hermes surges ahead of LVMH

In a significant development in the luxury industry, Hermes recently overtook French rival LVMH to become the world’s most valuable luxury group. This shift followed a dip in LVMH’s share price, driven by investor concerns after weaker-than-expected earnings. For Hermes, which has long relied on careful brand management and tight control of product availability, the milestone underscores the effectiveness of its high-margin, low-volume approach.

The company's market strategy contrasts with LVMH’s broader, acquisition-driven business model. Hermes maintains a strong focus on craftsmanship, timelessness, and tradition—values that resonate with high-end consumers, especially during times of economic or political uncertainty.

President Trump’s tariff policy is part of a broader effort to reshape global trade relations and reduce the U.S. trade deficit. While the move has been praised by some as a push for fairer trade, critics argue that the duties risk sparking trade wars and harming consumers through higher prices.

Luxury brands like Hermes are often caught in the crossfire of such policy shifts. On one hand, they face higher import costs and potential delays in customs processing. On the other, they must maintain an aura of exclusivity and excellence, which can be undermined if pricing becomes erratic or reactive.

In response, Hermes is choosing a proactive stance: raise prices methodically, maintain brand integrity, and avoid being perceived as scrambling to meet economic challenges.

American consumers and the luxury market

The United States remains a key market for Hermes. American consumers have long driven global trends in luxury fashion, and the brand's performance in North America is critical to its overall growth strategy. Price increases, especially when tied to external factors like tariffs, must be carefully communicated to avoid alienating loyal clients.

Luxury retail experts suggest that Hermes’ strategy may also influence competitors. If successful, the move to raise U.S. prices could encourage other European brands to follow suit, adjusting to the new tariff reality through pricing rather than margin sacrifice.

Hermes’ decision to raise US prices in response to Trump’s 10 percent tariffs illustrates the complex balance luxury brands must strike between protecting their bottom line and maintaining consumer goodwill. By acting swiftly and framing the increase as a necessary countermeasure rather than a simple markup, Hermes is reinforcing its image as a resilient and savvy player in the high-stakes luxury market.

Whether this approach sets a precedent for other premium brands remains to be seen. But one thing is clear: in the evolving landscape of global trade and luxury retail, agility is just as important as elegance.

As May 1 approaches, all eyes will be on Hermes and how the U.S. market reacts. Will demand remain steady? Will customers accept the higher prices? For now, the French luxury house appears confident that its American clientele will continue to value what Hermes stands for—regardless of the tariff barriers in place.