As transatlantic trade tensions flare over new US tariffs, French President Emmanuel Macron has urged companies to freeze US investments in order to protect France’s economic interests and rally European unity.
Macron described President Donald Trump’s 20 percent tariff hike on European goods as “brutal and unfounded”, warning of deep economic repercussions and calling for a united European response.
“Future investments, investments announced in the last weeks, should be suspended for a time,” Macron said on Thursday, at a gathering of top business leaders, ministers and Prime Minister François Bayrou in Paris.
Posting on X (formerly Twitter), Macron wrote: “Together and with all our sectors, we will be able to protect ourselves and accelerate the reindustrialisation of Europe”, adding that the European Union’s 450 million people are also its strength.
The US tariff hike is part of a broader shift in trade policy under Trump, who has adopted an increasingly protectionist stance.
Macron said Americans would end up “weaker and poorer” as a result of the tariffs and stressed the damage they could do to European economies.
“We need a European response,” he added, outlining a two-step plan starting in mid-April. The first step will target existing tariffs on steel and aluminium, followed by a broader EU-level response later in the month.
Macron meets industry heads as Trump tariffs shake key French sectors
Medef sounds alarm
France’s largest employers' federation, Medef, swiftly backed Macron’s position.
“The world is reorganising,” said Medef president Patrick Martin, who described the situation as “very serious”. He said France and Europe must now focus on competitiveness and cutting back regulation as global trade tensions rise.
Business group France Industrie echoed the call for action.
Its president, Alexandre Saubot, urged French manufacturers to consider suspending US investments as a show of strength. “To negotiate from a position of strength, we have to be ready to use all the levers at our disposal,” he said.
EU readies response to new US tariffs, France braces for fallout
The potential fallout is serious. Speaking to FranceInfo radio, Medef spokesperson Charles Znaty said the new tariffs could cost France tens of thousands of jobs. He said one in five French jobs is linked to exports.
Znaty estimated the impact could shave off up to 1.5 percentage points from France’s GDP and disrupt production chains.
In 2023, French direct investment in the US reached nearly €340 billion, making France the fifth-largest investor there. US companies have around €130 billion invested in France, mostly in manufacturing.
According to the American Chamber of Commerce, more than 4,200 French subsidiaries operate in the US, employing more than 740,000 people.
Trump escalates trade tensions with 200 percent tariff on EU wine, champagne
IMF warning
This warning is coming from further afield than Europe too. International Monetary Fund managing director Kristalina Georgieva said the tariffs posed a “significant risk” to an already fragile global economy.
“At a time of sluggish growth, it is important to avoid steps that could further harm the world economy,” she said, calling on the US and its trade partners to de-escalate.
The IMF is due to release a full analysis of the macroeconomic effects of the tariffs during its April summit in Washington.
The Paris CAC-40 stock exchange has fallen more than 3 percentage points, marking its worst day in two years.
