Europe’s luxury industry faces a new test as Trump’s tariffs threaten Ubrique’s leather legacy

Europe’s luxury industry faces a new test as Trump’s tariffs threaten Ubrique’s leather legacy (File imahge)Europe’s luxury industry faces a new test as Trump’s tariffs threaten Ubrique’s leather legacy (File image)

The luxury goods industry built on European heritage and craftsmanship is confronting a major challenge as President Donald Trump threatens to impose 50% tariffs on imports from the European Union. The proposed move has put the spotlight on towns like Ubrique, Spain, which serves as a hidden engine for brands like Louis Vuitton, Chanel, and Dior.

Ubrique: a town powered by leather

With a population of just 16,000, Ubrique has long been a quiet powerhouse in the global luxury supply chain. Generations of artisans have produced leather bags and accessories for the world’s top fashion houses, thanks to a robust ecosystem of skilled workers, machinery suppliers, and tanneries that’s taken decades to develop. Nearly a quarter of the town’s residents work in leather production, earning modest wages by European standards.

A monument to the town’s trade—the patacabra, a traditional leatherworking tool—stands tall at the town’s entrance, signalling Ubrique’s identity. “We’re all basically living off leather here,” said José Antonio Bautista, the deputy mayor.

Trump’s tariffs test the 'Made in Europe' appeal

Trump’s push to shift production to the U.S. is now forcing luxury houses to confront whether their European-made mystique can survive relocation. François-Henri Pinault, the CEO of Kering (which owns Gucci and Saint Laurent), recently told lawmakers that U.S. manufacturing makes no sense for luxury buyers: “It doesn’t make sense to my clients. I can’t explain that.”

Though Louis Vuitton opened a factory in Texas in 2019, efforts to expand there have fallen short. The brand planned to hire 1,000 workers; it employs only about 300. Recruiting and training artisans in the U.S. has proven difficult, and executives have warned that more American production could become “inevitable” if tariffs proceed.

Tariffs may not be the only threat

While Ubrique hasn’t yet felt a direct hit from Trump’s tariff plans, a broader slowdown in the luxury market is already pressuring local workshops. Brands are cutting back on orders. Only newer players like the French brand Polène, which makes all its bags in Ubrique, are expanding.

Past crises like the 2008 recession saw production shift to China, but the industry returned when concerns over counterfeits and quality control resurfaced. Unlike mass-market factories, Ubrique’s strength lies in small-scale precision and long-standing trust between brands and artisans—something that’s not easily rebuilt elsewhere.

A fragile but resilient ecosystem

Production in Ubrique may be broken down into specialized tasks—contrary to the romantic notion of one artisan crafting an entire bag—but those tasks still require high skill and years of experience. Even then, finding qualified workers is a challenge. “Out of every three new hires, you might only keep one,” said workshop owner Manuel Fernández.

Despite pressures, locals hope Ubrique’s unique reputation will endure. “There is a reason why all the brands have been working here for decades,” said Marcos Obando, a representative of a local employer group. “We can’t compete on price, so we have to bet on quality.”