While France faces less exposure than its EU neighbours Italy and Spain, the new tariffs announced by US President Donald Trump may significantly affect key industries such as aeronautics, wine and spirits, and luxury goods. French President Emmanuel Macron also vowed a “massive response”.
On April 2, Trump announced extensive tariffs on US economic partners, aiming to “rebalance global trade flows” as part of his commitment to reindustrialize the US and initiate a new ” golden age. Trump’s directive raises the existing rates to a standard 10 percent on all imports entering the US, and 20 percent for items sourced from the European Union.
Macron stated that the new tariffs represent a “harsh and unjustifiable” jolt to global trade, and that France’s response would be “more substantial” than its reaction to earlier tariffs imposed by Trump. According to him, French investment in the US should be suspended until the tariffs are clarified.
Prime Minister François Bayrou criticised US policy, stating,
“This decision is a disaster for the global economy. It poses a significant challenge for Europe. I also think it is a disaster for the United States and its citizens.”
Alcohol, Aeronautics, and luxury goods under threat
France’s major exports are expected to be significantly impacted by the new US tariffs, particularly in the aeronautics, alcohol, and luxury goods sectors. Aeronautics accounts for 20% of French exports to the US, with €9 billion in aircraft and spacecraft products exported in 2004.
Tariffs on agri-food and textiles are concerning because they significantly raise prices for these products. However, their impact is even more detrimental in sectors like automotive, aeronautics, and nuclear industries, which rely on intricate production chains where components are exchanged among multiple countries.
Airbus, a leading producer, may enjoy some protection due to its industrial production facility in Alabama and another site scheduled to open in the US in 2025. In contrast, Dassault Aviation, which sells nearly half of its private jets in the US, suggested in early March that its earnings projections for 2025 are heavily influenced by US tariff levels.
The White House states that pharmaceutical products, a crucial sector for France, will remain unaffected by the new tariffs.
Since mid-March, anxiety regarding tariffs has spread through France’s wine industry due to Trump threatening a 200 percent tariff on EU wine and champagne, following the EU’s retaliatory tariff on US whisky. The United States is the largest importer of French wine, purchasing €2.4 billion in 2024, in addition to over €1.5 billion in distilled alcoholic beverages, particularly cognac.
Some leaders in the French luxury goods sector, like LVMH (the parent company of Louis Vuitton, Dior, Guerlain, and Veuve Clicquot), have expressed concerns about tariffs, particularly since they export around 25% of their products to the United States.
In total, France exported 4.5 billion euros in luxury goods to the United States in 2024.
However, luxury brand Hermès responded positively to the potential tariffs. In February, CEO Axel Dumas stated, “Our company is nearly 190 years old and has navigated many tariffs over the years. If customs duties rise, we will adjust our prices accordingly.”
Possibility of economic downturn
Ironically, the US trade deficit set a new record just before Trump assumed office in January 2025, as imports surged sharply to offset, at least temporarily, the extra costs from the tariffs he pledged to implement. Now, Trump’s latest tariffs risk igniting a worldwide trade conflict during a challenging economic situation in Europe.
France has managed to sidestep the recession affecting Germany, achieving a growth rate of 1.1 percent, which slightly exceeds the bloc’s 0.8 percent average. Even so, in the past year, France’s public debt has skyrocketed, and there has been a spike in corporate bankruptcies.
The EU is contemplating retaliatory tariffs, backed by Macron, as member states prepare to vote on countermeasures on April 9. However, the bloc remains optimistic about the possibility of dialogue with the US.
