Luxury and e-commerce were on President-elect Donald Trump’s agenda Monday at Trump Tower as he met separately with LVMH’s Bernard Arnault and Alibaba’s Jack Ma.
It was Trump’s first meetings with such high-level fashion industry moguls, and the ostensible aim was to talk up the president-elect’s goal of adding jobs in the U.S.
He summed up both meetings in his typical way. On Arnault, Trump said, “One of the great men, you know that, right? And they all love this country. They’re going to do some wonderful things in this country … jobs, a lot of jobs.”
The president-elect on his meeting with Ma: “We had a great meeting and [he is] a great, great entrepreneur, one of the best in the world. And he loves this country and he loves China. You just saw what happened with Fiat, where they’re going to build a massive plant in the United States, in Michigan, and we’re very happy, and Jack and I going to do some great things. Small business, right?”
The chairman and chief executive officer of LVMH Moet Hennessy Louis Vuitton told the press assembled in the Trump Tower lobby that he is considering expanding his factories, including two in the U.S.
Arnault is looking at sites in North Carolina and Texas, and Trump said he is also considering a location in the Midwest.
“We may expand our factory that we have in California and build one either in Carolina or in Texas,” Arnault said.
“We have built some Louis Vuitton products for 25 years in California, in San Dimas, and we’re going to expand because of the success of the product,” he added. “We are looking at two possibilities, but it will be done shortly.”
The San Dimas site, opened in 1990, includes two leather goods workshops. Each Louis Vuitton workshop, whether in France or overseas, typically employs around 250 craftsmen.
Details of the discussions between the president-elect and Arnault were scarce, but a person familiar with the matter said Trump had proposed the meeting some time ago. It was part of a series of appointments with major fashion figures that have included Ma as well as the top editors from Condé Nast last week.
Beyond jobs, Arnault and Trump are said to have discussed the global economic situation and economic relations between the U.S. and Europe, the source said. Arnault does have a major financial interest in meeting with Trump in terms of the Louis Vuitton flagship at Fifth Avenue and 57th Street. Stores in the area around Trump Tower at Fifth Avenue and 56th Street have been severely impacted by security precautions put in place to protect the president-elect. Some retailers in the neighborhood have said their business has declined by 30 percent or more because shoppers are being scared off.
Arnault’s son, Alexandre, was also seen with his father in the Trump Tower lobby and likely was at the meeting with the president-elect. He was said to be toting an example of LVMH’s latest acquisition, a Rimowa suitcase.
This wasn’t the first time the luxury titan has met with a president. Arnault met with President Obama at the White House in 2011 when he traveled to Washington, D.C., to receive the Corporate Citizenship award from the Woodrow Wilson International Center for Scholars.
Jobs were also the main topic of discussion during Trump’s meeting with Alibaba executive chairman Ma and its president Michael Evans.
Sean Spicer, incoming White House press secretary, said, “During the meeting, the president-elect, Mr. Ma and Mr. Evans will be discussing how Alibaba can create 1 million U.S. jobs by enabling one million U.S. small businesses to sell goods in the Asian marketplace.”
Spicer did not elaborate on a call with reporters on how the new jobs would be created. Many Chinese and foreign companies already sell on Alibaba’s e-commerce platforms, such as Taobao and Tmall.
Ma said the meeting was “productive.”
“We discussed … helping American small businesses, selling things through Alibaba’s platform to China and to Asia,” Ma said. “We mainly talked about small businesses and young people and [selling] American agriculture products to China. We also think that the China-U.S. relationship should be strengthening, should be more friendly.”
Ma was asked about the U.S. relationship with China and said he thinks “the door is open and we can openly discuss relationships and trade issues.”
Trump railed against China on the campaign trail and has pledged to label the country a currency manipulator and impose tariffs as high as 45 percent on Chinese imports.
Trump also raised the ire of China when he made remarks on “Fox News Sunday,” suggesting that the U.S. might not be bound by the one-China policy that considers Taiwan as a part of China.
Trump’s remarks drew a sharp rebuke from China’s state-run Global Times newspaper, which went as far as to call the president-elect “ignorant as a child” and came as tensions have been on the rise between the U.S. and China, sparking concerns that a trade war could ignite between the two countries.
On Trump, Ma said he thinks the president-elect is “very smart and open-minded. I [told] him my ideas [on] how to improve the trade, especially supporting small business, cross border trade and business.”
He said Trump has concerns and solutions and wants to discuss them with China.
“I advised and suggested that we can go through the business community to understand the situation better and in a better way,” Ma said. “We specifically talked about [how] we will create and support one million small business [jobs] especially in the Midwest, small business on our platform to sell products.”
He said those products include not only agricultural items but also garments and wine.
Alibaba said “providing Chinese consumers with access to goods made outside of China has long been a key strategy” for the company.
Last year, Ma said he envisions 40 percent of the company’s business to be outside China in the next 10 years. In 20 years, he expects Alibaba to serve 2 billion consumers globally and support 10 million profitable businesses.
Some 100,000 brands sell on Alibaba’s platforms, according to a company fact sheet. Of those, 7,000 are U.S. brands with total sales of $15 billion to Chinese consumers in 2016, the e-commerce company said.
Alibaba cited Nike, Gap, Macy’s, Target, Levi’s and New Balance as just a small group of U.S. companies that sell on its platforms. The inclusion of Macy’s is somewhat ironic when it comes to Trump since the retailer dropped the tycoon’s products from its stores during the presidential campaign following the then-candidate’s comments about Mexican immigrants.
The company said 450 million mobile monthly users visit Alibaba’s platforms. It said its gross merchandise “value” for the year ended March 31 was $485 billion.
There are more than 300 million middle-class consumers in China with significant spending power of $4.6 trillion in aggregate net cash reserves for Chinese households, Alibaba said, citing statistics from McKinsey Global Insights, the People’s Bank of China and the U.S. Commerce Department.
In addition, there is a strong demand for U.S. goods, with some $500 billion in U.S. goods exported to China in the past five years, the company said. Cross-border e-commerce sales in China are expected to hit $150 billion by 2020.
Trump’s meeting with Ma came despite an ongoing outcry from major brands over the sale of counterfeits and fakes on Alibaba’s platform Taobao. Last month, the U.S. Trade Representative put the Chinese online giant back on its “notorious” markets blacklist, saying it allowed an “unacceptably” high level of fake products to be sold on its site. The American Apparel and Footwear Association has long complained about Alibaba selling counterfeits, pressure the Chinese company has resisted. Last week, Alibaba took legal action against several firms that it claimed were selling fake Swarovski watches on Taobao.