Bernard Arnault, Chairman of Louis Vuitton Moet Hennessy (LVMH), pointed out that tariff negotiations between the European Union (EU) and the United States are making little progress, and stated that the EU may need to take a step back if necessary.
According to Bloomberg and other sources on May 21 (local time), Arnault appeared at a French Senate hearing and said, "Negotiations must proceed in a constructive manner to achieve mutual concessions between the EU and the United States," adding, "At present, I have the impression that the negotiations are not going well."
He went on to urge the EU to reach a deal with the United States, saying, "Look at what the United Kingdom did. They negotiated very well." Unlike the EU, which has failed to accelerate tariff talks, the United Kingdom was the first to conclude negotiations with the United States.
Previously, at the annual shareholders' meeting last month, Arnault also stressed the urgent need to resolve tensions with the United States over tariffs, and warned that if a solution is not found, "it will be Brussels' (the EU's) fault."
Arnault said that President Trump is open to dialogue and that threats will not help the negotiations. He also mentioned that he has personal connections that could help facilitate trade negotiations with the United States. Arnault has maintained a close relationship with President Trump since the 1980s and attended President Trump's inauguration in January.
The United States is LVMH's largest market, accounting for about 25% of the company's total sales. Since most luxury goods are produced in Europe, if the United States imposes high tariffs on the EU, major luxury brands such as LVMH would suffer severe damage. To make matters worse, China, the company's second-largest market, is experiencing an economic downturn that has led to a decline in luxury demand, and is currently considering anti-dumping tariffs on EU brandy. Arnault pointed out that French cognac producers are facing the possibility of tariffs from both the United States and China, and warned that if both countries raise tariffs, it would lead to disastrous consequences. He also argued that the EU is underestimating the seriousness of the cognac situation.
Regarding French President Emmanuel Macron's recommendation last month that European companies suspend investments in the United States, Arnault emphasized, "It is not good for the state to intervene in the management of private companies," adding, "This generally leads to disaster."
LVMH announced that its sales in the first quarter decreased by 3% year-on-year. With luxury demand declining, particularly in China, the outlook for the second quarter remains uncertain. Citing sources, Bloomberg reported that LVMH is taking a cautious stance on its second-quarter outlook and that results for this quarter may not improve compared to the previous quarter.
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