SHANGHAI, Oct 9 Reuters European luxury shares have slid on investor concerns that Hermes handbags and Dior slingbacks may be Beijing39;s next targets for retaliation, following the EU39;s decision to slap tariffs on China EVs, but analysts say such a move is unlikely.

Its a question of how Beijing will respond to the EV tariffs. Is there going to be an escalation? I think yes. Is it going to go after luxury goods? I dont think so, said Patrice Nordey, CEO of Shanghaibased innovation consultancy Trajectry.

So far, moves by China in the ongoing titfortat trade spat with the EU have targeted brandy, pork and dairy, all of which are major industries for France, which lobbied for tariffs on Chinesemade EVs imported into the EU.

Shares of LVMH, which also markets highend Hennessy cognac, Hermes, Kering, Ferragamo, and Burberry dropped 26 on Tuesday after Beijing said it would impose temporary antidumping measures on imports of brandy.

Jacques Roizen, managing director of China consulting at Digital Luxury Group, said targeting luxury goods in China would run counter to what has been consistently favourable policies for luxury firms in the world39;s secondlargest economy, where Beijing is eager to keep more luxury spending, rather than see its consumers splurge in overseas markets.

He points to the example of Hainan, which has been built into a major dutyfree hub largely due to the acknowledgement from policymakers that luxury spending in China is good for the country….