Survey shows agri-food sector of France is worst hit by Trump tariffs
Paris: France's agri-food industry is the sector hardest hit by the upheaval from US President Donald Trump's trade tariffs, a survey by the country's central bank shows.
Business leaders in the agriculture and food processing sectors reported an average 2.6% negative impact on activity in their businesses from both the direct and indirect effects of levies, including uncertainty, possible retaliation and cheaper Chinese imports.
French industries face high uncertainty in the coming weeks as the European Union (EU) has until Aug 1 to clinch a preliminary trade deal that would lock in a 10% across-the-board tariff while negotiators try to hammer out a permanent agreement. Without an accord, rates on nearly all EU exports to the US will jump to 50%.
Officials from the European Commission, the EU's executive arm, are also trying to win concessions for particular sectors as part of a possible agreement.
'The policies of the Trump administration are of course disrupting the global economy, and incidentally Europe will have to reach a trade agreement with the United States,' Bank of France governor Francois Villeroy de Galhau said on RMC radio.
'But there are lots of things that depend on us Europeans and French people for our economic growth,' he added.
The central bank said its monthly survey of 8,500 businesses confirmed the economy is set to grow about 0.1% in the second quarter, failing to accelerate from the weak pace set at the start of this year year.
In addition to the volatile trade outlook, French businesses are reckoning with domestic political unpredictability as a minority government attempts to push through another round of spending cuts and tax increases.
While activity picked up last month in industry and services, that followed a slow month in May when several public holidays disrupted output.
Still, Villeroy said the Bank of France was maintaining its outlook for the whole of this year.
'We see slow but positive growth,' he said last Thursday.
'We are sticking with our 0.6% forecast – it's not enough in the long-term, and we need to take measures to strengthen the French and European economy.' — Bloomberg
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