New U.S. Trade Offensive: What Risks for the French Economy?

Donald Trump’s announcement of a new wave of 20% tariffs on European imports has shaken French exporters. Several key sectors, such as wine and spirits, aerospace, and dairy products, find themselves on the front lines of this economic standoff with Washington.

A Key Market for French Exports

With €47 billion in exports to the United States in 2024, France is heavily dependent on the American market, which ranks as its fourth-largest destination for goods after Germany, Italy, and Belgium. Some sectors are more vulnerable than others to this tariff, which could weaken many businesses.

Aerospace Under Pressure

A cornerstone of French exports to the United States, the aerospace industry generates nearly €9 billion in revenue across the Atlantic. While Airbus, thanks to its industrial presence in Alabama, may partially mitigate the impact of the new tariffs, other players like Dassault Aviation, heavily reliant on the U.S. market for its private jets, are likely to bear the brunt of the costs.

Hard Hit for the Wine and Spirits Sector

The United States is by far the largest foreign market for French wine and spirits, representing nearly 25% of their exports in 2024, or €3.8 billion. Cognac, which alone accounts for €1.5 billion, could be particularly affected. The Federation of Wine and Spirits Exporters (FEVS) estimates that these new tariffs could result in a €800 million loss for French producers.

Dairy Products in Uncertainty

The French dairy sector exports €350 million worth of cheeses and other products annually to the United States. Industry players are concerned about a significant impact on their sales, particularly for iconic cheeses like Brie and Emmental, which were already affected by a tax hike in 2019.

Luxury and Pharmaceuticals, Less Exposed

Although the U.S. represents a crucial market for French luxury goods (€4.5 billion in exports in 2024), the sector may be able to absorb these tariffs better due to its local presence and the relatively low price sensitivity of its customers. Companies like Hermès and LVMH have already announced that they would adjust their prices accordingly. Meanwhile, French pharmaceutical companies, which export €3.6 billion to the United States, are exempt from these new tariffs, as medical products have been excluded by the U.S. administration.

A Response Expected in Europe

In the face of this new trade offensive, Emmanuel Macron has called an emergency meeting with representatives from the most affected sectors and business leaders. Measures to support French businesses are being considered, while Brussels is preparing a potential counter-response to these tariffs, which are seen as unjustified.

Although these tariffs represent a shock to several French industries, their real impact will depend on the strategic adjustments of the affected companies and the negotiations to come between the European Union and the United States.