LVMH鈥檚 Arnault lashes out at Brussels over US trade tensions
PARIS 鈥 European governments urgently need to ease tensions with the United States over President Donald Trump鈥檚 tariffs, LVMH Chief Executive Officer Bernard Arnault said on Thursday, adding it would be 鈥淏russels鈥 fault鈥 if no solution is found.
鈥淓uropean countries should try to manage these negotiations, and not leave them to bureaucrats,鈥 he told the group鈥檚 annual shareholder meeting.
Without mentioning Mr. Trump, Mr. Arnault linked current market turmoil to global trade tensions and said LVMH鈥檚 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 鈥 who is France鈥檚 richest man 鈥 praised Trump for boosting economic growth and entrepreneurship and referred to a 鈥渨ind of optimism鈥 after attending his inauguration.
Since then, investor concerns over the possible economic damage of Mr. Trump鈥檚 trade policies have dragged LVMH鈥檚 shares 36% lower, reducing the group鈥檚 market capitalization by more than 100 billion euros ($114 billion).
Sector rival Hermes overtook LVMH as France鈥檚 most valuable company this week, though LVMH had regained the top position by Thursday鈥檚 market close. Around half of the LVMH鈥檚 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.
鈥淚鈥檝e already heard of several companies who are thinking about shifting more production to the United States, but you couldn鈥檛 say this is the fault of the companies. This would be Brussels鈥 fault,鈥 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.聽
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 鈥渕ade in France鈥 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. 鈥 Reuters
