What will happen to the handbags?

Pedestrians walking past a Chanel store in New York. The prices of some luxury items have been rising for years, including those of Chanel handbags, which doubled between 2016 and 2023. — Karsten Moran/The New York Times

A MONTH ago, luxury businesses were looking forward to a new era of deregulation, lower taxes and a booming stock market – and dreaming of well-heeled buyers splurging on opulent ballgowns and statement watches.

Instead, as the Trump administration imposes new tariffs on products from the European Union, they are bracing for a different reality.