PARIS – French businesses are bracing for significant economic disruption following the United States’ announcement of a 25-percent tariff on key French exports, including wine, cognac, and luxury goods. The move, which was authorized by US President Donald Trump on Wednesday, has sparked widespread concern across France’s iconic wine and spirits sector, a vital component of the country’s national identity and global trade.
The tariffs are widely regarded as a retaliatory measure against France’s digital services tax, which targets large tech companies, many of which are based in the US. The duties, expected to take effect within 10 days, threaten to have a major impact on the wine and spirits industry, which relies heavily on American consumers. The US is France’s second-largest export market for these products, and industry leaders fear that the tariffs could lead to a 20 percent decline in export volumes if the sanctions remain in place.
In response, French President Emmanuel Macron called an emergency meeting at the Elysee Palace on Thursday with leaders from the wine, spirits, and agriculture sectors. The government is working with European Union partners to formulate a coordinated response, which may include taking the matter to the World Trade Organization (WTO).
During the meeting, Macron emphasized that France would not face the crisis alone. His office described the session as “constructive,” with ongoing discussions on a unified European approach. “We are not isolated in this fight,” Macron’s office stated, reiterating France’s commitment to defending its industries.
Economy and Finance Minister Eric Lombard confirmed on Friday that the government is considering emergency support measures for the affected sectors. These could include targeted financial aid, tax relief, and export insurance. “We still hope to reach an agreement, but we are also preparing for a prolonged dispute,” Lombard said. He acknowledged that the economic fallout could impact France’s growth targets for 2025, with a potential increase in the public deficit.
Patrick Martin, president of the Movement of the Enterprises of France (MEDEF), the country’s largest employers’ federation, stressed the urgency of the situation. “This affects over 1.5 percent of our GDP and threatens thousands of jobs,” Martin warned in an interview with La Chaine Info.
Minister for Industry and Energy Marc Ferracci has announced that a National Industry Council will meet on Tuesday to assess the impact of the tariffs and begin formulating a response strategy. Speaking during a visit to an Airbus facility near Toulouse, Ferracci described the situation as “uncharted territory,” emphasizing the need for swift action to mitigate the economic damage.
Meanwhile, Foreign Trade Minister Laurent Saint-Martin issued a strong statement, urging a collective European response to the tariffs. “If we do not respond decisively, we risk sending the wrong message,” he said in an interview with BFM Business. “Only a united European stance will protect us from economic coercion.”
Some experts are calling for France to expedite new trade agreements, with former industry minister Roland Lescure suggesting that now is the time to accelerate the EU-Canada trade agreement (CETA) to reduce dependency on US markets.
The tariff dispute is also being viewed as part of a larger geopolitical shift in transatlantic relations. Historians and analysts note that Washington’s growing skepticism toward Europe is contributing to the strain. Jean-Francois Colosimo, a historian, commented, “In Washington’s view, Europe is seen as important but declining.”
Despite rising tensions, the economic relationship between France and the US remains robust. In 2023, France was the fifth-largest foreign investor in the US, with over $370 billion in assets, while the US is France’s top foreign investor, holding more than 140 billion euros ($153 billion) in French assets, according to the Banque de France.
Pascal Lamy, former director-general of the WTO, viewed the tariffs as both a challenge and an opportunity for Europe. “This is a test for Europe, but it is also a chance for the EU to lead the way in advocating for stability and open markets,” Lamy told Les Echos.
As EU trade officials prepare to meet to discuss a collective strategy, French businesses find themselves in a state of uncertainty, hoping for a diplomatic resolution while preparing for prolonged disruption. For now, one of France’s most treasured industries is navigating the complexities of an escalating trade dispute with its oldest ally.
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