Nick Kostov
Appearances
WSJ What’s News
Trump Spurs European Race to Rearm
The art of Trump whispering, I mean, it's not easy. I have no idea if Bernard Arnault will be successful or not. What I can say is that the entire luxury industry, whenever I speak to executives of rival firms, are firmly behind his efforts and really hope that he succeeds.
WSJ What’s News
Trump Spurs European Race to Rearm
Good question. I would describe them as friendly rather than close friends. They've known each other for a very long time. They were both real estate developers in New York in the 80s. Their families have ties. So one of Arnaud's sons, Alexandre, is close to Jared Kushner. Arnaud's daughter is close to Ivanka Trump.
WSJ What’s News
Trump Spurs European Race to Rearm
When Trump was shot in Pennsylvania last year, Arnaud called him to check in on him after that. They speak on the phone on a fairly regular basis. But I wouldn't say they're close friends. Actually, Trump said in an interview last year,
WSJ What’s News
Trump Spurs European Race to Rearm
No, I mean, it's Europe's largest company by market cap, and much of its value is tied up in the fact that it sells European heritage, it sells European savoir-faire. A lot of its goods are produced in Europe, and that is why they can charge high prices for it. And it also comes at a time when China, the economy there has slowed, Europe's economy is not really growing.
WSJ What’s News
Trump Spurs European Race to Rearm
And so there were very, very high hopes when Trump got elected that the US would really drive growth for LVMH and for other luxury goods companies. And obviously now tariffs... are a danger. Some of these brands have high pricing power, obviously, Louis Vuitton, Dior, others. But you know, they've been raising prices quite a bit since COVID. How much more can they do that?
WSJ What’s News
Trump Spurs European Race to Rearm
Analysts are pretty divided on that. And the US is obviously their biggest market.
WSJ What’s News
Trump Spurs European Race to Rearm
First of all, he's looking at moving some production to the US. So as we reported, he's looking at several projects. During Trump's first term, he opened a Louis Vuitton handbag factory in Texas so that Louis Vuitton would increase the percentage of its production that wouldn't be taxed in the event of tariffs. What he's trying to do is also lobby Trump, lobby other people in Washington.
WSJ What’s News
Trump Spurs European Race to Rearm
to say that LVMH is not the source of any trade disputes between Europe and America. When there were tariffs in the first term against European companies, these were because of European subsidies to Airbus. It was because France imposed a tax on tech giants. These had nothing to do with the luxury industry. But yeah, the art of Trump whispering, I mean, we've seen it with world leaders like
WSJ What’s News
Trump Spurs European Race to Rearm
Emmanuel Macron and Keir Starmer from the UK in the past week. It's not easy. Trump has obviously very strong views on what he wants to do. And we'll see. I mean, I have no idea if Bernard Arnault will be successful or not. What I can say is that the entire luxury industry, whenever I speak to executives of rival firms, are firmly behind his efforts and really hope that he succeeds.
WSJ What’s News
Trump Spurs European Race to Rearm
Yeah, it's difficult. I mean, obviously, Europe, like Canada and like others, have said that they will respond tit for tat to any US tariff. And so Trump obviously cares about the stock market, how it's doing. He cares about other economic indicators. And in the end, that might be what persuades him. But there's not a ton Europe can do other than saying that they'll respond in kind.
WSJ What’s News
Trump Spurs European Race to Rearm
And for luxury goods companies, yeah, clearly this is a problem. And Arnaud has said that he'd be willing to move production to the U.S., but some of his European peers just say it makes no sense. And for them, they want to be seen as to be made in Europe, made in Italy, and they're not even looking at moving production over there.
WSJ What’s News
Trump Spurs European Race to Rearm
The other thing to say is that LVMH obviously has a big drinks business. It owns cognac brands like Hennessy, champagne brands like Dom Perignon, Moet, others. And so there you just have to take the tax. There's nothing you can do. You can't move production of champagne to the U.S.,