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LVMH boss Bernard Arnault has criticised the EU’s efforts to strike a deal with the US to reduce Donald Trump’s tariffs, saying the bloc’s negotiations with Washington had got off to a “bad start”.
The chief executive of the French luxury company, one of Europe’s largest businesses by market capitalisation, urged the EU to engage “constructively” in negotiations with the Trump administration as he highlighted how the UK had quickly struck a trade deal with Washington.
“The United States is the world’s largest market, and it is very important to reach an agreement with the US for Europe,” Arnault told a French parliamentary hearing on Wednesday. “So far, things seem to me to be off to a relatively bad start.”
Trump and British Prime Minister Sir Keir Starmer unveiled the UK-US trade deal earlier this month, about five weeks after the president first announced “reciprocal” tariffs that hit many of America’s major trading partners, including Britain.
By contrast, it transpired last week the EU had only just started detailed talks with the US about a deal after a period of deadlock.
Trump’s 20 per cent “reciprocal” tariff on EU goods exported to the US has been halved until July 8 to allow for negotiations between the two sides.
Arnault said: “The negotiations must be conducted constructively . . . and therefore with reciprocal concessions. You saw what the British did, who negotiated very well. I hope to be able to convince Europe, with my limited resources and contacts, to take a similarly constructive stance.”
The US is LVMH’s biggest market, and tariffs threaten to further dent the luxury industry’s sales at a time when the sector was already contending with a slowdown due to weaker Chinese demand, among other things.
The majority of luxury goods are made in Europe, with little prospect of shifting the industry’s production en masse to the US, although Arnault said earlier this year that LVMH was looking at options to expand its limited manufacturing footprint there.
Arnault has built a personal relationship with Trump, whom he has known for decades, and attended the president’s inauguration in January.
So far, only the UK has finalised any relief from Trump’s trade war through a deal, by securing a tariff-free quota for its steel exports to the US and a lower levy of 10 per cent for 100,000 cars bound for America.
The US and China agreed a ceasefire in their trade war this month, slashing tariffs on each other’s goods for at least 90 days, to allow for negotiations. Trump has paused reciprocal tariffs on most of America’s trading partners, but maintained a baseline levy of 10 per cent on imports.
The talks between the US and EU have been progressing slowly, with the bloc saying it has struggled to clarify what Washington wanted until last week, when the Trump administration sent a letter listing its demands.
Sabine Weyand, the European Commission’s top trade official, told EU member state ambassadors in a briefing note that the bloc should not succumb to the US desire for “quick wins”.
But Arnault said a US-EU agreement was critical for industries like France’s cognac sector, which employs some 80,000 people.
LVMH owns Hennessy cognac, which has already been hit by falling sales in the US and China, where an anti-dumping probe in response to EU restrictions on Chinese electric vehicle sales is under way.
In the worst-case scenario where both the Chinese and US markets become closed to cognac, it would be “catastrophic” for the European economy, leading to job losses, Arnault said.
“We must do everything with Europe to prevent this . . . because the day it happens it will be too late,” he added.
