The French Billionaire Working His Trump Ties to Spare His Luxury Empire
It was a match made on Fifth Ave.—Bernard Arnault and the president go back decades. Can the LVMH chief now leverage that bond to fend off tariffs?
The day after President Trump survived an assassination attempt in Pennsylvania last summer, he received a call from a familiar French voice. It was Bernard Arnault, owner of the globe-spanning luxury empire LVMH MC 0.51%increase; green up pointing triangle.
Arnault wanted to check in on the man he had known for decades. Trump was also in the middle of a fierce presidential campaign, as well as several criminal proceedings.
The phone call from Arnault sent a clear signal: The luxury titan was sticking with Trump through thick and thin.
With Trump now in office and warning of steep tariffs on European goods, the question is whether Arnault can leverage his connection to keep his luxury conglomerate out of any trade wars. Tariffs would be a blow to Arnault’s empire, whose largest market is the U.S.—equal in size to all of Europe combined. Trump has called the European Union’s trade surplus with the U.S. an “atrocity,” but he also often leans on personal relationships to guide his policy.
The ties between the families are extensive, dating to when the two patriarchs were up-and-coming property developers in Manhattan. Arnault’s second-eldest son, Alexandre, has become friends with Trump’s son-in-law Jared Kushner. Ivanka Trump is a friend of Arnault’s daughter, Delphine, and a devotee of Dior, the brand Delphine oversees as CEO. The Arnaults’ conglomerate even pays rent to the Trump Organization, which is the landlord for LVMH’s Louis Vuitton store in Midtown Manhattan.
During Trump’s first term, Arnault’s decision to expand handbag production in the U.S.—and publicly promote the move with Trump—helped the luxury industry largely avoid an initial wave of tariffs that hit other European sectors. Trump left office before a second salvo of tariffs could take effect. Those levies, which some dubbed the “LVMH tax,” were designed to hit luxury goods in retaliation for a French digital tax affecting U.S. tech giants.
This time the contours of any trade war with Europe are unclear—Trump has so far backed off threats to Mexico and Canada. But Trump has ordered federal agencies to explore how to adjust U.S. tariffs to match those of other countries, an approach that threatens international trade rules in place for decades. The LVMH tax, meanwhile, still hangs over Arnault’s business empire.
Arnault built his luxury conglomerate into Europe’s most valuable company by betting on the marketing power of European craftsmanship. Consumers around the world pay eye-watering prices for handbags and other baubles because they are largely made in Europe with French savoir faire.
Such European exceptionalism has placed LVMH and its dozens of prominent brands on a collision course with Trump’s “America First” trade policies. The president is pressing foreign companies to shift production to the U.S.
LVMH is counting on strong U.S. demand to power its growth in the coming years after sales in China, its second biggest market, plunged around 20% last year. That stumble helped knock Arnault from his perch as the world’s richest person, which he ceded to another billionaire close to Trump: Elon Musk.
Arnault has mobilized lobbyists in Washington to make the case that Europe’s luxury industry isn’t the source of any trade disputes. He has placed 32-year-old Alexandre in senior roles at LVMH, where he has worked to cement the relationship with Trump and his family.
LVMH is studying the possibility of making several major manufacturing investments in the U.S. over the next two years, according to a company spokesman. LVMH operates 14 factories in the U.S., and is planning to pump more money into Tiffany, the iconic American jeweler it acquired in 2021.
“It’s evident that we’re being strongly encouraged by U.S. authorities to continue expanding our presence there,” Arnault said as LVMH reported earnings on Jan 28. “And I must say that, given the current environment, this is something we are seriously considering.”
Arnault is looking across the Atlantic at a time when his home market is becoming less hospitable. France’s economy contracted in the last three months of 2024, and the government is temporarily raising corporate taxes to help plug a hole in the country’s public finances. Returning home after a recent trip to the U.S., Arnault said, felt “a bit like a cold shower.”
“There’s hardly a better way to dampen enthusiasm,” he added of a planned rise in production-related taxes. “If the goal is to encourage offshoring, this is ideal.”
Arnault typically keeps a low profile, so many were stunned to see him sitting among former U.S. presidents and tech titans like Musk and Jeff Bezos at Trump’s inaugural ceremony.
Although seating was tight under the Capitol Rotunda, Arnault was flanked by his wife, Hélène Mercier-Arnault, and two of his five children: Alexandre and Delphine.
“Who would refuse an invitation from the president of the United States to attend their inauguration?” Arnault told reporters. “Besides, I’ve had a longstanding relationship with him.”
This article is based on interviews with people close to Arnault and LVMH.
New York in the 1980s
Arnault first crossed paths with Trump when the Frenchman was living in New York in the early 1980s. Arnault had left France after the election of François Mitterand, the first socialist president of France’s modern republic, led to higher taxes and the nationalization of swathes of the French economy.
At the time, Arnault didn’t own a single luxury brand. Instead he, like Trump, aspired to become a real-estate mogul. He opened offices at Rockefeller Center while Trump Tower was being erected on 56th Street and Fifth Avenue.
Arnault met Trump for the first time at a charity dinner at the Plaza Hotel in the early 1980s, years before Trump acquired the storied hotel. Trump was the embodiment of a distinctly American form of luxury, one that splashed brand names in boldface font on everything from buildings to jets.
Arnault’s most high-profile investments were on the Florida coast. U.S. real estate, however, was difficult terrain for the Frenchman, who struggled with an unfamiliar market. When Mitterand’s cash-strapped government made a U-turn toward more business-friendly policies, Arnault returned home.
When Arnault resurfaced in New York in the late 1980s, it was as the purveyor of a different kind of luxury. Arnault had purchased Christian Dior, and he was fighting for control of LVMH. He had garnered a reputation as France’s sharp-elbowed dealmaker back in France, drawing comparisons to Trump himself.
In 1989, Arnault helped sponsor a black-tie event for the French luxury industry at the Metropolitan Club in Manhattan. Trump and Arnault shared a table, according to video of the event. Arnault, who is seated next to a bejeweled Ivana Trump, beams as Trump arrives at the table and shakes his hand.
Arnault continued snapping up fashion and luxury brands, including American ones like Marc Jacobs and Donna Karan.
The real front lines of Arnault’s expansion, however, was the U.S. real-estate market. Dominating the fashion industry was like a game of Monopoly: Arnault’s brands needed to occupy prime locations in America’s most exclusive shopping corridors.
Arnault began snapping up properties around Fifth Avenue. He commissioned architect Christian de Portzamparc to design the steel and frosted glass LVMH Tower on 57th Street near Madison Avenue, just around the corner from Trump Tower. He bought a building on 57th Street and Fifth Avenue that he later turned into the largest Louis Vuitton store in the world. He got his hands on the opposite corner, occupied by Bulgari, when Arnault acquired the Italian jeweler in 2011.
“The corner of 57th and Fifth is without doubt the best retail corner in the United States and perhaps the world,” said Eric le Goff, a retail real-estate broker and vice chairman at Mona, a leasing and advisory firm.
In the weeks before Trump’s first inauguration in 2017, Arnault was among the first business leaders to ascend the golden escalator at Trump Tower to pay homage. He was flanked by Alexandre Arnault who, at 24 years old, had already known Trump’s son-in-law Jared Kushner for years.
Arnault had warned his son about Trump’s habit of forcefully pulling people toward him during handshakes. Still, Alexandre found himself lurching forward as Trump yanked his hand before a battery of TV cameras.
Behind closed doors, Arnault floated the possibility of LVMH opening a new plant, possibly in Texas. The proposal was right up Trump’s alley, showing that even the maker of some of the world’s finest luxury goods was willing to shift production to the U.S. under his administration.
As the men parted ways, Trump told Arnault: “Call me any time, you know that.”
‘I can’t tax him’
In 2019, the Trump administration imposed tariffs on $7.5 billion worth of European goods in retaliation for EU subsidies to Airbus. The duties targeted aircraft, cheese and alcohol like wine and Scotch. Luxury items like Champagne and handbags were spared, however, leaving some people scratching their heads.
The day before the tariffs were enforced, Arnault and Alexandre boarded Air Force One with Trump, en route to Johnson County, Texas, to inaugurate a new Louis Vuitton workshop. LVMH had invested $50 million in the facility, with plans to hire 1,000 employees within five years. The bags produced there—including the Neverfull, NéoNoé and Métis—bear the label “Made in U.S.A.”
When a French reporter asked Trump why he was slapping levies on wine and cheese while ignoring Champagne and leather goods, Trump said he had been discussing the issue with Arnault.
“I can’t tax him, because he moved to the United States. He was very smart. He was way ahead,” Trump said.
Trump’s presence at the unveiling caused consternation at Louis Vuitton’s offices in Paris. Nicolas Ghesquière, Louis Vuitton’s artistic director for women’s collections, wrote on Instagram: “Standing against any political action. I am a fashion designer refusing this association.”
Back in Texas, both Arnault and Trump appeared unfazed. “You’re an artist and a visionary,” Trump told Arnault. He added, with a grin, that Louis Vuitton was a name he knew well as a consumer. “Cost me a lot of money over the years,” he quipped.
Pulling Trump aside, Arnault confided plans to make a major investment in the U.S. He didn’t say what. Days later, LVMH went public with a bid for Tiffany. The roughly $16.2 billion deal was the biggest acquisition of Arnault’s career. And with Tiffany’s flagship store, LVMH now controlled three of the four corners on 57th Street and Fifth Avenue.
The store at the time was undergoing a costly renovation. Trump owned the “air rights” above Tiffany, meaning the store would need his approval for any changes that significantly added to the building’s height. It was an arrangement that stemmed from the construction of Trump Tower, which is directly next door. Trump had been so proud of the air rights deal that he named his fourth child Tiffany Trump.
The renovation didn’t end up adding to the height of the building—but Trump was involved in another way. He also owned a brick building bordering Trump Tower and the Tiffany flagship, and Tiffany had been renting the space as a temporary store.
Now LVMH was Trump’s tenant, and Arnault needed to extend his conglomerate’s stay in the brick building. Once the Tiffany flagship reopened, Arnault wanted to temporarily move Louis Vuitton’s flagship into the brick building while its permanent store underwent a sweeping renovation.
On the move
Arnault dispatched Alexandre to New York to become the No. 2 executive at Tiffany on Jan. 6, 2021—the same day that Trump supporters stormed the Capitol. By the time he left office, Trump was widely considered a pariah among business elites.
Alexandre Arnault was an exception. The young executive and his wife dined with Trump in 2023 at Mar-a-Lago to mark the closing of a new multi-year lease of the brick building.
Alexandre “is a young man on the move,” Trump wrote in a social-media post at the time. “We were celebrating the deal we made.”
Louis Vuitton’s Fifth Avenue store transferred to the brick building, turning it into a department-store sized temple of commerce. Giant sculptures of a giraffe and ostrich were added to the facade of the building.
Ahead of the 2024 election, Alexandre raised eyebrows when he attended Trump’s controversial campaign rally in New York, where a comedian likened Puerto Rico to a garbage dump.
After Trump won the election, Arnault moved Alexandre to Moët Hennessy, LVMH’s drinks division, which generates much of its revenue in the U.S. Alexandre took over as the unit’s No. 2 official this month, but people familiar with the matter say he is being groomed to eventually take the top job at Moët Hennessy.
The drinks business faces more difficult straits than the conglomerate’s leather goods and fashion division. Drinks have much thinner profit margins, making it harder for them to absorb any additional levies.
Shifting production to the U.S. isn’t an option. Champagne and Cognac, LVMH’s two main products, can only be produced in France under rules that link appellations of wine and liquor to specific regions of the country. LVMH sent extra shipments of Cognac to the U.S. in anticipation of tariffs during Trump’s first term, but that incurred additional manufacturing and storage costs for levies that were only in place for part of 2021.
For now, LVMH executives have been carefully mapping its exports across every customs code category—tracking their exact location in the shipping process—so the company can quickly determine its exposure the moment any tariffs take effect. And they are gearing up for more investments in Tiffany. LVMH is spending 10 times more on Tiffany stores than its previous owners and more than twice as much on marketing.
“Whatever people say, this is shaping up to be a very pro-business president,” said Tiffany CEO Anthony Ledru.
