How will Trump’s ‘Liberation Day’ tariffs impact France?

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As part of a promise to reindustrialise the US and usher in a new “golden age”, Trump on April 2 unveiled sweeping tariffs on US economic partners in order to “rebalance global trade flows”. Trump’s order hikes current rates to a baseline 10 percent on all imports to the US, and 20 percent for products coming from the European Union.

Tariffs are a flagship policy of Trump’s “America first” agenda, which aims to reduce the US trade deficit – which stood at nearly 100 billion dollars at the end of 2024 – and the country’s staggering overall debt, which hit a record $36.1 trillion – equivalent to 100 percent of GDP – in January 2025.

But they may also cause price hikes and supply chain disruption that could have a devastating effect on the global economy.

Macron said Thursday that the new tariffs were a "brutal and unfounded" shock for international trade, and that France’s reaction would be “more massive” than its response to previous tariffs imposed by Trump. He called for a suspension of French investment in the US until the tariffs are clarified.

Prime Minister François Bayrou on Thursday also criticised the US policy. "This decision is a catastrophe for the economic world," he said. "It is an immense difficulty for Europe. I believe that it is also a catastrophe for the United States and for American citizens."

‘The dirty 15’

In line for the highest tariffs were a group the president dubbed “the dirty 15” – countries accused of “unfair” treatment of the US that caused its trade deficit.

France, which exports €47 billion worth of products to the US each year, did not make the list as it has a trade deficit of €4.1 billion with the US. But it will be impacted by tariffs placed on the European Union, which placed second on the list after China.

As the United States' leading trading partner, the Eurozone accounts for 18 percent of American trade. Just three EU countries are responsible for over 50 percent of exports to the United States: Germany, Italy and Ireland.

By contrast, must of France’s external trade – and 60 percent of its exports – is done within Europe.

This might spare France the worst impact of the new tariffs. “France is less exposed than these countries to the US market, to which it sends only 8 percent of its total exports,” said Maxime Darmet, an economist at Allianz Trade Group

“So far, France has not been severely impacted by Trump's initial announcements on tariffs, which were limited to steel, aluminium and automobiles, unlike Germany and Italy, which export a lot of vehicles,” he added.

Watch moreTrump tariffs on steel and aluminium come into effect, sparking EU retaliation

Aeronautics, alcohol, luxury goods under threat

But several of France’s key exports are likely to be hit hard by the new US tariffs, including aeronautics, spirits and luxury goods.

A fifth of all French exports to the US are linked to aeronautics, with €9 billion in aircraft and spacecraft-related products entering the US in 2004.

This sector is likely to be hit the hardest, said Darmet. “Tariffs on agri-food and textiles are problematic, as they will sharply increase the prices of these products. But they are far more damaging in areas such as the automotive, aeronautics or nuclear industries, which depend on more complex production chains with components that travel back and forth between several countries.”

Major producer Airbus and may be somewhat protected as it has an industrial production site in Alabama and a second US site set to open in 2025. But aircraft manufacturer Dassault Aviation, which sells up to half of its private jets in the US, indicated in early March that its earnings forecasts for 2025 depended largely on the level of US tariffs.

Pharmaceutical products, another very important sector for France, will not be affected by the new tariffs, according to the White House.

Anxiety over tariffs has permeated France's wine industry since Trump in mid-March threatened to impose 200 percent tariffs on wine and champagne from the EU after the block imposed a retaliatory tariff on US whisky.

The United States is the biggest importer of French wine, buying €2.4 billion worth in 2024, along with over €1.5 billion euros in “distilled alcoholic beverages”, namely cognac.

Even with the lesser 20 percent tariff, the French wine industry anticipates a drop of around €800 million in exports, according to a press release issued on Wednesday night.

Fears over tariffs have been voiced by some leaders in the French luxury goods industry, including LVMH (parent company of Louis Vuitton, Dior, Guerlain and Veuve Clicquot) which exports a quarter of its products to the United States.

In total, France exported 4.5 billion euros in luxury goods to the United States in 2024.

But luxury brand Hermès had a sanguine response to the prospect of tariffs. “Our company is almost 190 years old, and we've been through a lot of tariffs,” said CEO Axel Dumas, in February. “If customs duties increase, we'll raise our prices to compensate.”

At a meeting with representatives of sectors impacted by the tariff measures on Thursday, Macron said that Europe should respond to the tariffs "industry by industry".

Risk of recession

Ironically, the US trade deficit broke a new record ahead of Trump taking office in January 2025, as imports rose sharply in an attempt to counter – at least temporarily – additional costs from the tariffs promised by the new president.

Now Trump’s new tariffs threaten to spark a global trade war amid a bleak economic climate in Europe.

France has so far avoided the recession underway in Germany and has maintained 1.1 percent growth that is slightly above the 0.8 percent average for the bloc. Even so, in the past year France’s public debt has skyrocketed and there has been a spike in corporate bankruptcies.

“The French economy is treading water,” Darmet says. “We are not far off recession and further economic shocks could tip it over the edge.”

The EU has threatened to impose retaliatory tariffs – a measure supported by Macron – with member states set to vote on countermeasures April 9.

But the bloc still hopes that dialogue with the US is possible. “Europe is prepared to respond… We're also ready to engage. And to go from confrontation to negotiation,” said European Commission President Ursula Von der Leyen on Thursday.

This article was adapted from the original in French by Joanna York.

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