LVMH CEO pushes for US-EU free trade zone amid tensions

In Paris, Bernard Arnault, the chairman and CEO of LVMH, called for a free trade zone between the European Union and the United States during LVMH's annual shareholder meeting. This call to action comes in the wake of recent tariffs announced by President Donald Trump that threaten European industries. Arnault emphasized the need for European leaders to engage in clever negotiations with the U.S. administration instead of solely relying on the bureaucratic power of Brussels, which has a history of imposing regulations detrimental to EU businesses. He underlined the impact of unresolved trade tensions, stressing that they could severely harm European sectors. Arnault's remarks echoed a similar appeal by Elon Musk in early April for a zero-tariff arrangement between the U.S. and the EU. The EU has consistently advocated for a “zero-for-zero” trade agreement, yet President Trump has rejected this approach. LVMH has been experiencing challenges, as demonstrated by its recent 7.8% decline in shares following an unexpected drop in first-quarter sales. Arnault warned that if European negotiators are ineffective, LVMH may have to boost production in the U.S. to avoid potential tariffs. Additionally, LVMH previously shifted part of its production to the U.S. in 2019, establishing a workshop in Alvarado, Texas. Though this move was celebrated as part of a broader strategy to revitalize U.S. manufacturing, the Texas site has reportedly underperformed thus far. Arnault noted that the U.S. market comprises 25% of LVMH's total sales, underscoring the importance of maintaining positive working relations with the United States. Arnault further criticized France’s proposed corporate tax increases, labeling them as detrimental to the “Made in France” initiative and raising concerns that they could compel businesses to relocate. He commended the U.S. economic model for its lower taxes and industrial investments backed by the state. A visual protest occurred outside the conference, where demonstrators called for higher taxes on the wealthy, emphasizing a taxation policy proposed for France's ultra-rich that could significantly benefit public services.