Trade War: Macron Presents Plan to Respond to Trump's "Brutal" Decision

Donald Trump signed an executive order on Wednesday imposing tariffs of at least 10% on all imports into the United States and 20% on those from the EU.

For two hours on Thursday, the French president received Prime Minister François Bayrou, members of the government, business leaders, and members of the most vulnerable sectors—aeronautics, agriculture, viticulture, chemicals, electronics, metallurgy, healthcare, and cosmetics—at the Élysée Palace. The automotive industry, which will be hit by a specific 25% tax, was not represented.

Emmanuel Macron did not paint a rosy picture: the American decision will have "a massive impact," he said, recalling that exports to the United States represent "1,5% of French GDP," 3% of Italian GDP, 4% of German GDP, and 10% of Irish GDP.

He called for an initial response in mid-April, with "responses to the steel and aluminum package," which has already been overtaxed by the United States. "The second, more massive response, to the tariffs announced yesterday (Wednesday, editor's note), will be made at the end of the month," he promised, after a sector-by-sector study and work with other EU member states.

And "until things have been clarified," Emmanuel Macron called on his interlocutors to "suspend" the investments that were to be made in the United States.

In 2023, the stock of French foreign direct investment (FDI) in the United States represented $370 billion (€335 billion), or 6,9% of total FDI entering the United States.

Do not play "solo"

The President of the Republic's greatest fear seems to be disunity within the EU. We must "play European," he said, without "going it alone." "I know what will happen: the biggest players will tend to go it alone. And that's not a good idea."

"But if Europeans play together (...), with real solidarity," they will achieve "what must be our objective: the dismantling of tariffs," he said.

On LCI a little later, Medef president Patrick Martin noted that the 1,5% share of GDP cited by Emmanuel Macron represented "hundreds of thousands of jobs at risk" in France.

But he noted "a great deal of convergence in the analysis of the situation across all sectors, from one country to another, from one employer to another." "My prediction is that the Americans will not succeed in breaking this front," he said, and will end up like "the tables turned."

The New York Stock Exchange, where American savers invest heavily, reacted very poorly on Thursday, with the tech-heavy Nasdaq closing with a loss of 5,97%. European stock markets also suffered. In Paris, the CAC40 closed down 3,31%.

"A path of negotiation"

In 2023, the United States was France's fourth largest export market, behind Germany, Italy, and Belgium, according to French customs.

The manufacturers affected by the new taxes must "hold nothing back" and, above all, must "remain united," said Alexandre Saubot, president of France Industrie, as he left the Elysée Palace.

Among the most exposed sectors are aeronautics (with 9 billion euros in 2024, it represents a fifth of France's exports to the United States), luxury goods (perfumes, leather goods, etc.), wines and cognac.

"We are assessing the potential impacts," an Airbus spokesperson told AFP on Thursday.

The Federation of Beauty Companies (FEBEA) fears the "impact" of Donald Trump's decision and calls for "a strengthening of the sector's competitiveness in its primary market: the European market," which represented 40% of its exports in 2024 compared to 13% for the United States.

Gabriel Picard, president of the Federation of Wine and Spirits Exporters (FEVS), said after the meeting that "a de-escalation was needed, even if this requires a phase of power struggles."

Foreign Trade Minister Laurent Saint-Martin injected a touch of optimism into the day. "There is still a path for discussion and negotiation" with the United States, he told AFP and Le Parisien. Referring to the announced 20% additional tariffs, he predicted that "there would be quite a few adjustments in the next 15 days."