Urges EU Leaders to Take Direct Control of US Trade Talks at Shareholders' Meeting
Bernard Arnault, chairman of Louis Vuitton Mo?t Hennessy (LVMH), said that tensions with the United States over tariffs must be resolved urgently, warning that if no solution is found, it would be "Brussels' (European Union·EU) fault."
On the 17th (local time), according to AP and Bloomberg News, Arnault stated at the annual shareholders' meeting, "European countries should not leave these negotiations to bureaucrats but manage them themselves."
Arnault said the current market turmoil is due to global trade tensions and that LVMH's business will also be affected. However, he did not directly mention U.S. President Donald Trump. Arnault has maintained a long-standing friendship with President Trump and even attended his inauguration in January. Nevertheless, concerns over tariffs caused LVMH's stock price to fall 35.7% from its January peak. The previous day, LVMH temporarily lost its position as France's largest market capitalization company to Herm?s during trading hours.
LVMH is a French luxury goods company operating in fashion and leather goods, cosmetics and perfumes, watches and jewelry, and wine and spirits. Twenty-five percent of its sales come from the United States. In particular, the U.S. market accounts for 34% of its wine and spirits segment.
If President Trump's tariff policy is applied as originally planned, a 20% tariff will be imposed on LVMH's main products, European Union (EU)-made fashion and leather goods. President Trump has currently suspended reciprocal tariffs on countries other than China for 90 days. Additionally, amid trade retaliation disputes between the U.S. and Europe, the U.S. once threatened to impose a 200% tariff on champagne and European wines.
Arnault revealed that he is considering relocating production facilities to the United States to reduce the impact of U.S. tariffs. He said, "I have heard that many companies are considering moving production bases to the U.S. This cannot be considered a corporate responsibility. It is Brussels' responsibility."
He also advocated for the establishment of a free trade zone between the U.S. and the EU, criticizing that the EU "is run by bureaucratic power rather than political power, spending time making regulations."
However, the market views the possibility of LVMH relocating production facilities as limited and believes it will not significantly help mitigate tariff risks. Except for three Louis Vuitton workshops and several Tiffany jewelry manufacturing sites, LVMH has almost no production capacity in the U.S. Foreign media reported that the Louis Vuitton production facility in Texas is considered one of the worst-performing worldwide.
Arnault called for support for European wine producers. He said, "I have the impression that the UK is showing a more concrete stance in the negotiation process. European governments, especially the French government, must pay maximum attention. If no agreement is reached, it is expected to have a tremendous impact, particularly on our wine production culture."
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