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“Our bags are exactly the same as those from boutiques, but cost less than one-tenth the price.”
“We make what the brand sells — for $20, not 2,000.”
“This jacket retails for nearly $100. Ours?”
These aren’t whispers from the underground. They’re viral soundbites echoing across TikTok, where factory workers and insiders are lifting the veil on luxury — one post at a time.
In the wake of America’s reignited trade war with China in early 2025, a new wave of digital disclosures is challenging what consumers think they know about high-end fashion.
The images are striking: rows of near-identical handbags, coats, and trainers being constructed with similar materials and stitching techniques — yet sold at a fraction of the price.
(One major caveat: not all these factories are legitimate, and some claims blur the line between authenticity and counterfeit.)
Yet even before tariffs made headlines, luxury’s veneer was already beginning to fray.
According to Bain’s 2024 luxury report, the industry posted its first customer decline in over two decades. Bernstein, once bullish, revised its luxury forecast from +5% growth to -2%.
The truth is this: if craftsmanship and branding are no longer tightly bound, then luxury is losing its most potent currency — trust.
Structural Shock | Tariffs as a Systemic Trigger
In April 2025, a firestorm few anticipated erupted across global markets.
President Donald Trump revived the U.S.–China trade war with the announcement of a tariff of 145% on Chinese goods. China responded with a 125% countermeasure, and unexpectedly, Southeast Asian manufacturing hubs — including Vietnam, Thailand, Cambodia — as well as India, Japan, and the EU, were swept into the fray.
At first glance, brands may seem insulated — especially if final assembly occurs outside the U.S. But in practice, global supply chains rarely provide clean delineations.
Manufacturing Costs Rise, Logistics Disrupt, Efficiency Plummets
As tariffs redrew the map of global manufacturing, brands rushed to shift production out of China in search of lower costs or political neutrality. But this migration, while seemingly strategic, has proven far more complicated in practice.
Factory Flight Fallout
Australia offers a clear case of how fragile this reconfiguration can be. The country’s fashion sector remains deeply tied to Chinese production.
According to Fibre2Fashion’s TexPro database, in early 2024 alone, Australia imported over AUD 2.1 billion in apparel — more than half from China, with most of the rest coming from Vietnam, Bangladesh, and India.
On paper, wages may be lower in Southeast Asia, but so is efficiency. Factories often rely on imported materials, face unstable infrastructure, and lack skilled labour — all of which drive up inefficiencies. A basic T-shirt that takes 3–4 days to produce in China can stretch to 7–10 days in Vietnam, with higher error rates.
Layered over this is the complexity of cross-border logistics. A garment might be sourced in China, cut in Vietnam, finished in Thailand, and shipped to Australia — each border crossing multiplying the time, cost, and risk of delays.
Moving production, in practice, is like starting over. Brands must rebuild workflows, retrain workers, and accept longer production timelines. Mistakes are inevitable — and reputational damage is hard to undo.
Ultimately, these disruptions are passed on to consumers: higher prices, slower product launches, fewer discounts, less predictable collections, and erratic availability.
Despite the risks, brands continue to diversify their manufacturing. Why?
Because it’s no longer just about cost — it’s about resilience.
The label “Made in China” has become politically charged. The spectre of future U.S. sanctions or retaliation from Beijing — already seen in cases like TikTok and Huawei — has made heavy reliance on Chinese production a strategic vulnerability. The pandemic, too, proved how brittle even the most sophisticated supply chains can be.
No brand, no matter how established, can afford to be fully dependent on one country. Diversification may be expensive, but it’s become a form of insurance.
Tariffs’ Ripple Effect
This volatility is reshaping one of luxury’s core pillars: pricing.
Luxury houses have traditionally followed one of two pricing models:
But in today’s climate, both models are under strain.
Brands using localised pricing may raise U.S. prices sharply to protect margins, risking volume losses.
Globally-priced brands face a tougher choice: either absorb the tariff hit or raise prices globally — affecting even markets untouched by the trade conflict.
Either way, the end consumer picks up the tab.
In response to the shifting environment, Hermès — a brand renowned for its commitment to global price parity — recently announced plans to raise retail prices in the U.S. starting 1 May 2025, to offset the new tariffs.
We are going to fully offset the impact of these new duties by increasing our selling prices in the United States from May 1, across all our business lines,” confirmed CFO Eric du Halgouet to Business of Fashion.
Such moves don’t mean that all brands will follow suit. But they illustrate a broader truth: luxury pricing is entering a period of deep uncertainty.
In today’s volatile environment, no brand is immune — but some are more exposed than others.
While precise forecasts remain elusive, several key indicators help us understand which companies may be most vulnerable to price disruptions.
Brands that rely heavily on Chinese production, have concentrated regional markets, and cater to price-sensitive customers are likely to experience greater pressure.
For these players, future price increases may not be a choice — but a commercial imperative.
When Price Stops Making Sense…
The fault lines have long been there. The trade war didn’t disrupt a stable system — it exposed one already under strain.
Luxury once rose on the strength of craftsmanship and bold design. But in recent years, brands have turned to business and scale, managing desire like inventory. Industrialised production feeds growing demand, but often at the cost of originality.
What once felt like art now feels like strategy.
The dream-weaving — once subtle and irrational — has given way to formulaic drops and relentless marketing cycles. Creativity is stretched thin, and in the race to outperform competitors, imitation has become a business model.
Tariffs have only accelerated the reckoning.
With prices climbing and quality plateauing — or declining — consumers are starting to ask a harder question:
If price no longer signals prestige, what exactly are we paying for?
Luxury has always sold more than products — it has sold promise. The promise of craftsmanship, heritage, exclusivity, and desirability. But what happens when the façade fades?
If the materials are similar, the production methods indistinguishable, and the marketing increasingly transparent — are we paying for quality, or for belief?
There’s nothing inherently wrong with desire. But in a world where perception can be manufactured and prestige can be reverse-engineered, perhaps it’s time to ask not why luxury costs so much — but whether the value we attach to it is still real, or simply rehearsed.
In the end, maybe true luxury isn’t about the label, but about the clarity with which we choose what — and who — we invest in.
Written by Giselle Wang, Casper Intern, in collaboration with the editorial team at Casper Magazine.
References
We believe in grounding every story in facts. The following sources supported our research — because what we say should be as credible as it is compelling.
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