Tariffs, Price Increases, and Their Trickle-Down Effect | What 2025 Means for Luxury Bags and Resale Values

In 2025, even the most seasoned luxury shoppers are feeling the effects of a shifting global economy. Import tariffs and price hikes are quietly changing how, and where, luxury goods are bought and sold. From Chanel to Hermès to Prada, brands are facing cost pressures that inevitably make their way to the boutique floor. For shoppers, understanding these changes isn’t just financial—it’s strategic shopping.

What’s Happening: Tariffs in the Luxury Sector

The Numbers and Context

After years of unbroken growth, the global personal luxury goods market is expected to slow in 2025, with Bain & Company forecasting a 2–5% decline from the previous year. The United States, representing roughly $85 billion of the worldwide market, has become a focal point in the tariff debate.

Several categories of European luxury goods imported into the US, from handbags to textiles, are now facing tariffs of up to 15% (depending on the country of origin and material). These duties, introduced in response to broader trade policy shifts, directly impact the final selling price of goods for virtually all major brands.

What Brands Are Saying

Luxury houses have largely remained diplomatic, but behind the scenes, executives have admitted that tariffs are testing pricing power. For many, absorbing the full cost isn’t an option. Reports from manufacturers show exports to the US now carry additional duties that directly erode profit margins.

A French leather-goods maker told Le Monde that the new tariffs “compress profitability by 10 to 15 points per product,” forcing them to either raise retail prices or re-evaluate production geography. The ripple extends beyond finished goods—materials, packaging, and shipping are all more expensive, tightening the entire supply chain.

How This Affects Luxury Pricing

Higher New Luxury Prices

When tariffs rise, so do retail prices. Some brands have already adjusted their US pricing in 2025. For example, select Chanel styles saw mid-year increases of 7–10%, while Hermès raised prices across leather goods by roughly 4–6%, depending on model and material. Granted, these brands typically increase prices at least once per year, so it's unclear if these increases are directly tied to recent changes in US tariffs.

These hikes are often positioned as “seasonal adjustments,” but industry insiders point out that import duties are a key driver. The result? Shoppers are paying more for the same pieces, sometimes hundreds or even thousands of dollars more, than they did last year.

The Trickle-Down Effect on Pre-Owned Luxury Items

Price increases in the primary market inevitably influence the pre-owned market, too. When a new medium Chanel Classic Flap rises from $10,800 to $11,800 in the Chanel boutique, then resale listings for gently used versions naturally creep upward as well. The logic is simple: buyers benchmark pre-owned prices against retail.

However, not every effect is linear. During periods of economic uncertainty, higher boutique prices can also cause a slowdown in new-luxury spending, temporarily widening the gap between what sellers hope to get and what buyers are willing to pay. For shoppers, this creates a window of opportunity on the secondhand market, particularly for coveted pieces that hold steady resale value.

Timing and Condition Matter

Pieces produced before recent price increases often represent exceptional value. Because tariffs primarily affect new imports, items already in circulation—especially those in new/excellent condition—may offer relative savings.

Condition also becomes more important in tighter markets. Many buyers are shifting their focus from “like new” to “well-loved but beautiful,” prioritizing overall craftsmanship and quality over perfection. For shoppers, this means more flexibility: a gently worn suede Loulou or a well-kept Birkin can provide nearly the same satisfaction as a brand new one, but at a fraction of the new retail price.

How Luxury Shoppers Can Navigate 2025

Buy Smart, Not Just New

With retail tags climbing, purchasing pre-owned isn’t just sustainable—it’s financially strategic. Seek out heritage pieces with strong resale demand, such as:

• Hermès Kelly 25, Birkin 25, or Constance 18

• Chanel Classic Flap or Coco Handle

• Dior Saddle Bag or Lady Dior

• Bottega Veneta Andiamo

These models tend to hold or increase in value after price increases, as buyers turn to the secondary market for relief.

Watch Price Gaps Between New and Pre-Owned

Monitor the price spread between boutique and resale. When the difference widens significantly—say a new Prada Re-Edition 2005 at $2,400 versus a pre-owned one at $1,300—you’re looking at a smart secondhand buy. Conversely, if resale prices start mirroring retail, patience may pay off in the long run.

Think Long-Term

If you’ve had your eye on a major piece, it may make sense to act sooner rather than later. While tariffs may stabilize, few brands consider rolling back prices once they rise. A well-chosen piece in a classic material and color (think black caviar Chanel, gold epsom for Hermes, and tan suede for Bottega or Saint Laurent) is likely to retain strong demand in years ahead.

What to Watch Going Forward

Tariff and Trade Policy Developments

The US and EU are still negotiating several open trade disputes, and additional duties could be introduced (or removed) later in 2025 or early 2026. Some brands are exploring moving production to non-tariff regions to mitigate costs, but those shifts will likely take time to put into action.

If tensions ease, shoppers may see a temporary pause in price hikes. But if tariffs persist or escalate, expect another round of price increases from luxury brands by spring 2026.

The Consumer Climate

Luxury demand remains resilient, but the post-pandemic boom has cooled. Inflation and slowing wage growth are prompting even affluent consumers to be more selective. Analysts expect shoppers to gravitate toward enduring, collectible designs rather than seasonal novelties. Shoppers are favoring investment-grade classics that hold value over time. After all, classics are "classic" for good reason.

Final Tariff Takeaways

Tariffs may sound like a boring policy vocab word, but their effects ripple all the way inside your closet. In 2025, understanding how import duties drive price increases can help you shop—and invest—more intelligently. Whether you’re adding a new iconic piece to your collection, or choosing a pre-owned treasure, this year’s market dynamics make one thing clear: luxury may cost more, but informed choices can make it worth every dollar.