Did LVMH Dodge Trump's Tariffs by Opening a New Plant in Texas?
The Trump administration recently imposed tariffs on a wide range of European products in response to the EU's violation of World Trade Organization (WTO) rules with its government subsidies for aircraft manufacturer Airbus (OTC: EADSY). Those subsidies, the U.S. argued, gave Airbus an unfair advantage over its American rival Boeing (NYSE: BA).
The WTO initially ruled in favor of the U.S. in 2010, and European governments were ordered to stop subsidizing Airbus. However, the WTO's follow-up review in 2016 found that those orders hadn't been followed, which cleared the way for retaliatory tariffs from the U.S.
Image source: Louis Vuitton.
Shares of French luxury giant LVMH (OTC: LVMUY) -- which owns upscale brands like Louis Vuitton and Hennessy -- initially fell on fears that those tariffs would hurt its sales of products to the U.S. But when the tariffs were actually announced, LVMH's leather handbags and Hennessy cognac were left off the list.
Source Fool.com
