‘The Five': Trump's aim to clean up US cities, make them safe is ‘not too much to ask'
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Yahoo
11 minutes ago
- Yahoo
Analysis-US tariffs will be test of luxury brands' pricing power
By Mimosa Spencer and Sami Marshak PARIS/NEW YORK (Reuters) -Luxury goods companies were spared their worst case scenario in Sunday's EU-U.S. trade deal but they face a delicate balancing act as already weak consumer demand tests their ability to raise prices further. Big labels like Chanel and LVMH's Louis Vuitton and Dior have relied on dramatic price increases in recent years to drive a chunk of their profit growth. Jacques Roizen, managing director, China, at Digital Luxury Group, said the deal struck by U.S. President Donald Trump and European Commission President Ursula von der Leyen on Sunday, imposing a 15% tariff on EU goods, brings much needed certainty to luxury's key U.S. market. Yet, "brands are treading carefully with further price hikes to avoid alienating younger and occasional shoppers," he said. Although baseline duties are below a hefty 30% levy that Trump had threatened just a couple of weeks ago, they are a far cry from the zero-for-zero tariff deal Brussels was hoping to clinch. Fresh tariffs also come as the luxury goods industry is counting on the U.S. as former growth engine China sputters and sales globally are in decline. 'Tariffs are definitely going to affect my buying behaviour, depending on the rate of the tariff. I would think twice before I just pick things up,' said Abida Taher, a 53-year-old physician who was out shopping at Saks Fifth Avenue in New York City last week and likes Valentino among other Italian and French brands. Bernard Arnault, chairman and CEO of French luxury giant LVMH, embarked on an intense lobbying campaign with EU leaders to ease tensions with the Trump administration and last week announced plans for a new Louis Vuitton factory in Texas. Such a move, however, would be too complicated and costly for most European brands - involving the transfer of local skills that take years to build up, industry experts caution. Some high end labels say they will be able to draw on pricing power to offset the cost of tariffs, but analysts and industry practitioners warn some players have limited wiggle room after a series of outsized price tag hikes. Big luxury companies profited from a rebound of consumer demand after the pandemic, hiking prices by 33% on average between 2019 and 2023, according to RBC estimates. The price tag of Chanel's classic quilted flap bag more than tripled between 2015 and 2024, while the Lady Dior bag and Louis Vuitton Keepall travel bag more than doubled, according to UBS analysts. LUXURY DISCONNECT Half of the luxury industry's sales growth came from price hikes in the four years from 2019, compared to a third between 2016 and 2023, UBS analysts said. Yet the sector lost 50 million customers last year, according to consultancy Bain, as economic pressures and price fatigue dampened appetite for designer clothing and handbags. Brands that got the pricing balance wrong are the ones struggling more today, said Flavio Cereda, who manages GAM's Luxury Brands investment strategy. "The significant deceleration in momentum, uneven as it was, is a natural consequence of a period of excess," said Cereda. Hermes, which notably held back on large price increases during the post pandemic boom, has outpaced rivals and analysts forecast a 10% rise in second quarter sales when it reports on Wednesday. UBS estimates that a 15% tariff on exports to the United States will require luxury brands on average to raise prices by around 2% in the United States, or around 1% globally if they want to avoid widening regional price gaps – or face an impact of around 3% on earnings before interest and tax. Such hikes may prove challenging while the latest round of luxury players' earnings shows little sign of a rebound. LVMH's second quarter sales missed expectations, weighed down by weakening sales at flagship brands Louis Vuitton and Dior, while outerwear specialist Moncler's sales contracted by 1% and Kering-owned Gucci is expected to continue to struggle. Caroline Reyl, head of premium brands at Pictet Asset Management, said there has been a "disconnect" between the prices of certain luxury items and their perceived quality and creativity in the past four years. Precious Buckner, a 37-year old clinical therapist from North Carolina, was looking at a Chanel classic flap bag at Saks Fifth Avenue in Manhattan last week but said if it goes up in price because of tariffs it would no longer be worth it. 'I'm going to these stores to see the size, the fit, how I like it, so I can get it on resale," Buckner said, noting she would be willing to pay $8,000 for a bag on a resale platform like The RealReal or Fashionphile rather than pay $12,000 in a department store. Bain forecasts worldwide luxury goods sales will fall by between 2% and 5% in 2025 after a 1% decline last year, the biggest contraction in 15 years excluding COVID. To counter the downtrend, the industry has embarked on a recruitment drive, with new designers at Chanel, Gucci, LVMH labels Dior, Celine, Givenchy and Loewe, and Versace. Yet, renewing styles to find a better alignment between prices and product value will take time. "You can't snap your fingers and do it in a couple of weeks," said Reyl.
Yahoo
11 minutes ago
- Yahoo
What we know about Trump's visit to Scotland
From trade deals to Gaza, here is what Keir Starmer is expected to discuss with Donald Trump at the US president's Ayrshire golf course. Sir Keir Starmer has met with Donald Trump in Scotland today to discuss a range of issues including the humanitarian crisis in Gaza and tariffs. The US president is hosting the prime minister at his Turnberry golf resort in Ayrshire as his four-day visit to Scotland draws to a close. Starmer is expected to spend most of the day with Trump where he will, among other things, attempt to press the president for a trade deal on UK-made steel. It comes after Trump announced he had agreed 'the biggest deal ever made' between the US and the European Union after high-stakes talks with Ursula von der Leyen at Turnberry on Sunday. While the prime minister will be seeking to strengthen the UK's economic ties with the US on the golf course, business secretary Jonathan Reynolds told BBC Breakfast there is "more to do" in negotiations and that a "resolution" is unlikely to be reached today. Here, Yahoo News takes a look at Trump's visit to Scotland and what is likely to be on the agenda today. Why is Trump here? Trump has been visiting his mother's ancestral homeland of Scotland since Friday for a mixture of business and pleasure. The president has been pictured playing golf at his Turnberry course in South Ayrshire and was also expected to visit his other course on the Menie Estate, north of Aberdeen, during his visit. He is expected to fly back to Washington on Tuesday, following his meetings on Monday with Starmer and Scotland's first minister John Swinney. Swinney has vowed to press Trump to exempt Scotch whisky from US trade tariffs, which he says are currently costing the local industry £4m a week. Swinney also promised to raise the situation in Gaza with Trump, as it was 'causing deep unease and concern and heartbreak within Scotland'. Is this a state visit? This four-day trip is not a state visit, although Trump is scheduled to make a state visit to the UK between 17 and 19 September. It will be a historic first, as Trump is the first elected leader in modern history to be invited back for a second state visit to the UK – the first being in 2019 during his first term as president. The full details of the visit have not yet been released, but it will include a full ceremonial welcome and a state banquet at St George's Hall in Windsor Castle. There had been speculation the King would host Trump in Scotland at Balmoral or Dumfries House, after Charles wrote a letter to him in February inviting him to a state visit. However, it is understood that with the state visit scheduled just a few months later, both sides had agreed to wait until the formal gathering. Anti-Trump campaigners have said they plan to stage a mass demonstration in central London on the first day of his trip. What are Trump and Starmer likely to discuss? Trump and Starmer are set to hold "wide-ranging" talks at the Turnberry golf course, No 10 Downing Street said, including advancing the implementation of the UK-US "economic prosperity deal". The deal was agreed upon in general terms between Starmer and Trump in May, although further details are yet to be hammered out. Progress was made in June when both leaders signed off on terms reducing tariffs on car and aerospace imports to the US. But agreement on a similar arrangement for Britain's steel imports was not reached, leaving tariffs on steel at 25%. American concerns over steel products made elsewhere in the world, then finished in the UK, are said to be among the sticking points on which Starmer will attempt to make progress. Business secretary Jonathan Reynolds told BBC Breakfast that negotiations have been "going on on a daily basis" since an agreement was reached on automotive and aerospace imports but that it "wasn't job done". "There's a few issues to push a little bit further today," he told the broadcaster. 'We won't perhaps have anything to announce a resolution of those talks. "But there's some sectors that we still need to resolve, particularly around steel and aluminium, and there's the wider conversation about what the US calls its reciprocal tariffs.' Starmer is also likely to use his time with Trump to raise concerns over the starvation of the population in Gaza caused by Israel's blockade of the Palestinian territory and restrictions on UN aid workers. As the pair met, Starmer said people were 'revolted at what they are seeing on their screens' with regard to Gaza. The prime minister has condemned Israel for restricting the flow of aid into the territory, alongside the leaders of France and Germany. However, Washington's stance on Israel has been far less critical, having provided money to the controversial Gaza Humanitarian Foundation, which has been criticised for bringing starving Palestinians to its sites only for them to allegedly be shot at by Israeli troops and US contractors. Click below to see the latest Scotland headlines No 10 said Starmer is expected to welcome Trump administration's work with mediators Qatar and Egypt to bring about a ceasefire and would discuss further what more can be done to bring the fighting and "unspeakable suffering" to a halt while securing the freedom of Israeli hostages. Starmer has also been facing pressure from more than 220 MPs calling for an immediate recognition of a Palestinian state – something French president Emmanuel Macron has promised to do – although it is unclear if the PM will bring this up with Trump today. Securing peace in Ukraine will also be high on the agenda, with the prime minister set to talk about their shared desire to bring an end to the war, No 10 said. They are expected to reflect on progress in their 50-day drive to arm Ukraine and force Putin to the negotiating table. After their meeting the two leaders will travel on together to a private engagement in Aberdeen. Read more US and EU agree trade deal - with bloc facing 15% tariffs on goods into America (Sky News) Palestinian state recognition is a one shot opportunity for Starmer – but what does he want to achieve? (The Independent) Scottish Secretary to give Donald Trump 'warm welcome' (The Telegraph)
Yahoo
11 minutes ago
- Yahoo
Former Democratic North Carolina Gov. Roy Cooper will run for Senate in 2026
RALEIGH, N.C. (AP) — Former Democratic Gov. Roy Cooper will run for the U.S. Senate in North Carolina, giving Democrats a proven statewide winner in an open-seat race that is expected to be one of the most competitive 2026 contests. Cooper made the announcement Monday with a video released on social media and his campaign website. The former two-term governor will immediately become the front-runner for the Democratic nomination in the race to succeed retiring Republican Sen. Thom Tillis. Republican National Committee Chairman Michael Whatley plans to run for the GOP nomination, with President Donald Trump's blessing, according to two people familiar with his thinking who were not authorized to discuss the matter publicly before an official announcement. Whatley, the former North Carolina GOP chairman, received Trump's endorsement after the president's daughter-in-law, Lara Trump, passed on the seat. Cooper's candidacy is a big recruiting win for Democrats, who see the open seat as a top pick-up opportunity in what will be a challenging year. To retake the majority in 2026, Democrats need to net four seats, and most of the contests are in states that Trump easily won last year. Trump won North Carolina by about 3 percentage points, one of his closest margins of victory. Trump endorsed Whatley on his Truth Social platform Thursday night, posting that should he run, 'Mike would make an unbelievable Senator from North Carolina.' Ex-U.S. Rep. Wiley Nickel already has been campaigning for the Democratic nomination for months. Party primaries would be March 3. Cooper, 68, has been on statewide ballots going back a quarter-century — serving 16 years previously as attorney general before being first elected governor in 2016. With a political career going back nearly 40 years, Cooper has had a knack for winning in a state where the legislature and appeals courts are now dominated by Republicans. State law barred Cooper from seeking a third consecutive gubernatorial term. He spent the spring on a teaching gig at Harvard. State and national Democrats were longing for Cooper to join the race well before Tillis announced June 29 that he would not seek a third term. That news came after Trump threatened to back a primary candidate against him as Tillis opposed Medicaid reductions in the president's tax break and spending cut package, Democrats haven't won a Senate race since 2008 in North Carolina, where independent voters tend to vote Republican in federal elections. Statewide races can be financially exorbitant because there are so many television markets — hundreds of millions of dollars are expected to be spent in the race. Cooper's recent political history has painted him as a fighter against what he's considered extreme Republican policies, while at times finding consensus with GOP rivals. When asked by The Associated Press last December about a Senate bid, Cooper replied: 'If you're going to run for public office again, you must have your heart and soul in it, you must have the fire in the belly." As governor he steered the state through the coronavirus pandemic, Hurricanes Helene and Florence and a law that became an early flashpoint in the culture wars over access to public restrooms by transgender people. That 'bathroom bill' was rolled back early in Cooper's first term, and the state's economy soared during Cooper's tenure, marked by big jobs announcements and low unemployment. While Cooper also managed to get Medicaid expansion approved and a landmark greenhouse gases law enacted, he fell short in stopping legislation that widely expanded private school vouchers and narrowed abortion rights. Cooper's perceived accomplishments raised his national profile in 2024, making him as a potential running mate for Kamala Harris until he said it 'just wasn't the right time' for him and for North Carolina. Republicans have argued that Cooper remains susceptible politically, citing what they consider an extreme record supporting abortion rights and opposing school choice that led to many vetoes. They've also cited a gubernatorial administration marked by spending overruns at the state Department of Transportation; its response to Helene and delays in rebuilding or renovating homes after Hurricanes Matthew and Florence; and executive orders that restricted businesses and school instruction during COVID-19. As for the roaring economy, Republicans credit themselves through lower taxes and deregulation. Tillis' retirement announcement heartened far-right Republicans and strong Trump supporters who have been unhappy for years with his willingness to challenge Trump's actions and his Cabinet agency choices. Republicans had deferred to the president's daughter-in-law Lara Trump, who is a North Carolina native, North Carolina State University graduate and a popular former RNC co-chair with Whatley during the 2024 election campaign. She posted on the social media platform X on Thursday that she would not seek the Senate seat.
