LVMH’s Arnault lashes out at Brussels over US trade tensions
PARIS — European governments urgently need to ease tensions with the United States over President Donald Trump’s tariffs, LVMH Chief Executive Officer Bernard Arnault said on Thursday, adding it would be “Brussels’ fault” if no solution is found.
“European countries should try to manage these negotiations, and not leave them to bureaucrats,” he told the group’s annual shareholder meeting.
Without mentioning Mr. Trump, Mr. Arnault linked current market turmoil to global trade tensions and said LVMH’s business would suffer.
US tariffs could include a 20% charge on European fashion and leather goods and 31% for Swiss-produced watches if fully applied. Last week, Mr. Trump paused his reciprocal tariffs on most countries for 90 days, but maintained a general 10% levy.
In January, Mr. Arnault — who is France’s richest man — praised Trump for boosting economic growth and entrepreneurship and referred to a “wind of optimism” after attending his inauguration.
Since then, investor concerns over the possible economic damage of Mr. Trump’s trade policies have dragged LVMH’s shares 36% lower, reducing the group’s market capitalization by more than 100 billion euros ($114 billion).
Sector rival Hermes overtook LVMH as France’s most valuable company this week, though LVMH had regained the top position by Thursday’s market close. Around half of the LVMH’s shares are owned by the Arnault family.
To try to lessen the impact of US tariffs, Mr. Arnault repeated on Thursday that he would consider moving more production to the United States, where the group makes 25% of its annual sales.
He said Brussels would be to blame if no deal is negotiated and Europe loses some of its production, and that other companies were also considering increasing US manufacturing.
“I’ve already heard of several companies who are thinking about shifting more production to the United States, but you couldn’t say this is the fault of the companies. This would be Brussels’ fault,” he said.
The European Commission, the European Union (EU) executive, has said that the US has yet to set out its negotiating position, while US officials have not commented on talks with the EU.
Analysts have said any production shifts would likely be limited and would do little to mitigate tariff risks.
Apart from three Louis Vuitton workshops and some Tiffany jewelry-making sites, LVMH has little production capacity in the United States. Much of its business comes from selling “made in France” luxury leather goods, champagne and spirits.
Production problems at its high-profile Texas facility have meant the site has been consistently ranked among the worst-performing for Louis Vuitton globally, Reuters has reported. — Reuters
