French businesses have been asked to suspend investments in the United States following the announcement of fresh US tariffs on European goods. President Emmanuel Macron made the call during a meeting with top business leaders, citing growing uncertainty caused by former President Donald Trump’s latest trade actions.
Macron described the new tariffs as “brutal and unfounded” and warned of major economic consequences for both Europe and the US. He addressed the meeting alongside Prime Minister François Bayrou and key government ministers.
“For now, we need to hit the brakes,” Macron said. “The path ahead is uncertain, and these tariffs will have a massive impact on Europe’s economy.”
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Trump’s 20% tariff sparks market reactions
Trump’s administration has imposed a 20% tariff on European imports, a move that has already affected financial markets. The Paris stock exchange dropped more than 3%, marking its sharpest fall in two years. The announcement has raised concerns among French small and medium-sized enterprises (SMEs), which are particularly exposed to shifts in cross-border trade.
Employers call for caution and strategy
Patrick Martin, head of the employers’ federation Medef, described the situation as “very serious,” warning that trade relations with the US are becoming “brutal” and unpredictable. Alexandre Saubot, president of France Industrie, urged companies to reconsider their investment strategies, suggesting they may need to delay or cancel US expansion plans.
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EU prepares two-phase response
Macron emphasised the need for a united European approach and warned against unilateral action by individual countries. The European Union has outlined a two-step plan to respond to the US tariffs:
Mid-April: The EU will introduce countermeasures targeting existing tariffs on steel and aluminium.
End of April: A more aggressive response is expected following a full assessment of the impact of the new US trade barriers.
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Economists highlight retaliatory options
Vincent Vicard, an economist at the Centre for Prospective Studies and International Information, stated that the EU has tools it can use to respond. These include reducing imports from the US, limiting access to European markets for US companies, and even freezing property rights of American firms operating in Europe.
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Investments at risk
French investments in the US were valued at $370 billion in 2023. These investments support over 741,000 jobs. Businesses now face difficult decisions. The uncertainty surrounding the trade situation may force companies to hold back or change their long-term plans.
Macron said the US may also face consequences from the tariffs, predicting that Americans will end up “weaker and poorer” due to the trade restrictions.
