Bernard Arnault, the chairman and CEO of French luxury conglomerate LVMH, says to blame Brussels — the location of the EU headquarters — if tariff policies can’t be worked out with the U.S.
“Europe is not run by a political power but by a bureaucratic power that spends its time issuing regulations that are unfortunately imposed on all member states and that penalize our business sectors,” Arnault said at LVMH’s annual shareholder meeting on Thursday.
He said that if companies shifted their business elsewhere, this would be “Brussels’ fault.”
The 76-year-old billionaire called for a free trade zone between the EU and the U.S. — echoing similar comments from Elon Musk — and said the current trade tensions could seriously hurt European industries. Arnault said European leaders should negotiate “cleverly” with the Trump administration and take a more prominent role in discussions.
“European countries should try to manage these negotiations and not leave them to bureaucrats,” he said. The European Commission, the EU’s executive branch, negotiates trade deals on behalf of all 27 member states.
While President Donald Trump paused his heavy reciprocal tariffs on countries for 90 days, his 10% universal tariff still stands, and there’s swirling uncertainty about what kind of levies are to come moving forward. Other U.S. tariffs could include a 20% charge on European fashion and leather goods and a 31% duty on Swiss-produced watches.
Arnault repeated comments that he would consider moving more production to the U.S. to lessen the impact of the U.S. tariffs. At the moment, around 25% of the group’s annual sales come from the country.
“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,” he said, blaming the European Commission.
Experts, however, have said that shifting production locations would do little to mitigate tariff risks.
In 2019, LVMH opened a facility in Alvarado, Texas during Trump’s first term, and the two toured the plant together, calling it a symbol of U.S. manufacturing revival. But production problems have made the site among the worst-performing for Louis Vuitton across the globe. Arnault admitted Thursday that the location has underperformed.
Arnault attended Trump’s inauguration and said in January that a “wind of optimism” was blowing through the U.S. as a result of his election. The Frenchman has also praised Trump for boosting economic growth and entrepreneurship.
It’s been a rough week for LVMH, which has long been the world’s dominant luxury group, with brands including Louis Vuitton, Dior, Fendi, Hennessy, Moët & Chandon, and Givenchy under its umbrella.
Earlier this week, Hèrmes briefly overtook LVMH as France’s most valuable company after LVMH shares fell 7.8% due to an unexpected drop in first-quarter sales. Investor concerns over the U.S. tariffs have dragged company shares down more than 35% and have reduced the group’s market capitalization by almost $115 billion.
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