His remarks, in the wake of the tariffs announced by President Donald Trump, appeared to echo a similar call by Elon Musk on April 5 for a zero-tariff zone between the U.S. and EU. The EU has long pushed for a “zero-for-zero” trade agreement — with both sides dropping tariffs — but Trump has rejected the offer.

Speaking at LVMH’s annual shareholder meeting, Arnault said European leaders should negotiate “cleverly” with the U.S. administration and that national governments should take a more prominent role instead of than leaving negotiations solely in the hands of Brussels, the center of EU’s “bureaucratic power.”

France’s LVMH has for decades been the world’s dominant luxury group — known for products such as Moët & Chandon Champagne, Hennessy Cognac, Louis Vuitton handbags and Dior perfumes — but this week lost its title as the world’s largest luxury company to rival Hermès.

“Europe is not run by a political power, but by a bureaucratic power that spends its time issuing regulations that are unfortunately imposed on all member states and that penalize our business sectors,” the 76-year-old CEO said.

The European Commission, the EU’s executive branch, negotiates trade deals on behalf of all 27 member states. The bloc is the largest trading entity in the world.

LVMH shares fell 7.8% earlier this week, following an unexpected drop in first-quarter sales.

Arnault said the company may be forced to expand U.S. operations. “We would be forced to increase our American production to avoid tariffs if Europe failed to negotiate with intelligence,” he said.

In 2019, LVMH shifted part of its production to the U.S. by opening a Louis Vuitton workshop in Alvarado, Texas, during Trump’s first term. Trump and Arnault toured the facility together, promoting it as a symbol of U.S. manufacturing revival.

But on Thursday, Arnault admitted the Texas site has underperformed so far. According to documents presented at the meeting, the U.S. accounts for 25% of LVMH’s total sales.

Arnault also criticized France’s proposed corporate tax increases, calling them a “tax on ‘Made in France’” and warned they could push companies to relocate abroad.

He praised the U.S. model, citing lower taxes and state-backed industrial investment. “When you come back to France after spending a few days in the U.S., it’s a bit of a cold shower,” he said.

Outside the Louvre Museum conference hall, where the meeting took place, dozens of protesters demanded higher taxes on the wealthy, carrying a “Tax the rich” sign alongside and a large puppet of Arnault depicted as a thief, a rope around his chest and hands tied behind his back.

“A tax of 2% on the wealth of France’s ultra-rich could bring in up to €25 billion a year,” said Fanny Petitbon, a spokesperson for the group 350.org. “That would be enough to invest in public services and accelerate an energy transition that benefits everyone.”