Bernard Arnault, the billionaire chairman of luxury goods giant LVMH, has voiced his dissatisfaction with France’s economic direction.
The 75-year-old, Arnault, the richest man in Europe, warned that the new measures—aimed at curbing France’s growing budget deficit—could have far-reaching consequences for French businesses.
Arnault criticized the planned hike as counterproductive, suggesting it would only encourage companies to shift operations abroad.
What he said
Arnault told reporters on Tuesday: “I’ve just come back from the USA and I could see the wind of optimism reigning in that country.
“When you come back to France and see that we’re about to increase taxes by 40% for companies that manufacture in France, it’s incredible. It’s the ideal way to encourage offshoring.”
- His remarks followed France’s unveiling of a 2025 budget that includes a €53 billion package of tax hikes and spending cuts. A key component of this package is a proposed increase in corporate taxes, which would raise the rate for companies with annual revenues above €3 billion, such as LVMH, to 41.2%.
- While the French government has framed the tax increase as a temporary measure designed to reduce the country’s budget deficit, Arnault expressed skepticism.
Finance Minister Eric Lombard has assured that the tax hike will last only one year, but Arnault remains unconvinced.
What to know
Arnault’s comments come as French lawmakers prepare to debate the proposed budget, which is a response to France’s growing fiscal challenges. The tax hikes, which would impact LVMH and other large corporations, are designed to help address a spiraling budget deficit exacerbated by rising government spending.
- Against the backdrop of these tax hikes, Arnault expressed a clear preference for the business-friendly policies of U.S. President Donald Trump. Arnault, who attended Trump’s recent inauguration, praised the U.S. for its positive economic climate and said LVMH was considering expanding its U.S. operations.
- Trump, during his appearance at the World Economic Forum in Davos, Switzerland, echoed Arnault’s sentiments, calling on global businesses to set up operations in the U.S. and take advantage of the nation’s favorable tax policies.
He said, “My message to every business in the world is very simple: Come make your product in America and we’ll give you among the lowest taxes of any nation on earth. “If you don’t make your product in America, which is your prerogative, you will have to pay a tariff.”
This would include establishing more factories in the United States to avoid the tariffs that Trump has promised to impose on foreign-made goods.
The stark contrast between the economic environments in France and the U.S. has left Arnault weighing his options, with the possibility of further investment in the American market looking more appealing than ever.
