Donald Trump’s implementation of a 20% tariff on over 47 billion euros in French exports to the U.S. significantly impacts various sectors, especially aerospace, luxury goods, and wine. While France’s exports to the U.S. are less critical to its economy than for Germany, industries like aerospace and luxury face vulnerabilities. Airbus’s local presence may mitigate some effects, while the wine sector anticipates substantial losses despite previous tariff threats being shelved. The pharmaceutical industry, however, is exempt from these tariffs.
The Impact of Trump’s 20% Tariff on French Exports
In a bold move, Donald Trump initiated a sweeping global trade initiative, imposing a 20% tariff on over 47 billion euros worth of French goods exported to the United States. This significant decision targets various sectors, particularly those with a high reliance on American markets.The United States ranks as France’s fourth-largest export destination,following Germany, Italy, and Belgium, as reported by French customs authorities.
While France imports more than it exports to the U.S. (with imports projected at 52.7 billion euros in 2024), it is less dependent on American exports compared to nations like Germany, which sees 3.8% of its GDP tied to U.S. sales, versus France’s 1.6%. Nonetheless, specific sectors are at risk due to the newly imposed tariffs.
Aerospace: A Key Sector at Risk
A substantial portion of French exports to the U.S. is linked to the aerospace industry, with approximately one-fifth of these exports attributed to this sector. In 2024, France’s aerospace exports, particularly in aircraft and spacecraft, reached a remarkable 9 billion euros.
Airbus, a prominent European aircraft manufacturer based in Blagnac, France, has positioned itself as a major player in the American aerospace market, being the largest customer for U.S. aerospace exports.
“We are currently evaluating the potential impacts of these announcements,” an Airbus spokesperson told AFP on Thursday.
The company’s local industrial presence may provide some insulation:In 2015, Airbus opened a final assembly plant in Mobile, Alabama, where it produced 500 A320 and A220 aircraft by the end of 2024.
Additionally, Airbus sources over 15 billion dollars worth of components annually from around 2,000 American suppliers across 40 states, contributing to 275,000 jobs within the U.S. The company plans to expand its American operations further in 2025 with a second A320 assembly line, which is expected to create 1,000 new jobs in the Gulf Coast region.
Meanwhile, Dassault Aviation, another key French aircraft manufacturer that sells a significant portion of its private jets to the U.S., has indicated that its profit forecasts for 2025 will be heavily influenced by the tariff levels in the country.
Luxury Goods: Resilient Yet Vulnerable
In 2024, France exported luxury products—including perfumes, toiletries, and leather goods—valued at 4.5 billion euros to the United States. It’s important to note that not all luxury items in demand in America are direct exports.
Among the leading French luxury brands,LVMH operates several production facilities in the U.S.,accounting for a quarter of its total revenue.
The affluent luxury clientele tends to be less sensitive to price changes, including potential tariff increases. “Our house has been around for nearly 190 years; we’ve faced tariffs before,” stated Axel Dumas, CEO of Hermès. “If tariffs rise, we will adjust our prices accordingly,” he added.
Pharmaceuticals: An Exemption to the Rule
The pharmaceutical sector also plays a crucial role in French exports to the United States, contributing 3.6 billion euros in 2024. Fortunately, the White House announced that certain categories, including pharmaceuticals, will be exempt from the new tariffs.
Wine and Cognac: Concerns for the Future
Globally renowned for its Bordeaux, Burgundy, and Champagne, France exports a significant amount of wine to the U.S. In 2024, around 2.4 billion euros worth of ‘grape wines’ and more than 1.5 billion euros of ‘distilled alcoholic beverages,’ particularly cognac, were shipped across the Atlantic.
The French wine and spirits industry is bracing for a potential loss of around 800 million euros in exports, as indicated in a statement released late Wednesday.
In a twist, Trump appears to have shelved the idea of imposing a 200% tax on European alcoholic beverages that he had considered in mid-March. Nonetheless, the French Federation of Wine and Spirits Exporters (FEVS) warns that the U.S. decision to implement a blanket 20% tariff on all imports from the European Union will have profoundly negative consequences for the French and European wine and spirits sectors.