The French agri-food industry is feeling the most severe impact from US trade tariffs, according to the Bank of France’s latest survey. Business leaders in agriculture and food processing reported an average 2.6% decrease in activity, influenced by a range of factors including direct tariff effects, retaliatory risks, and an influx of cheaper Chinese goods.
The future of France’s economy is uncertain as the European Union rushes to finalise a trade agreement with the US by August 1. If no deal is reached, tariffs on almost all EU exports to the US could rise to 50%. While the EU negotiates for sector-specific exemptions, the outcome remains unclear.
The Bank of France’s business survey, which polled 8,500 companies, indicates that economic growth will likely remain modest, with a projected increase of just 0.1% for Q2. This comes as businesses face not only trade disruptions but also political instability at home, where the government seeks to implement further spending cuts and tax hikes. Despite this, the central bank is holding steady on its full-year growth forecast of 0.6%, emphasising the need for strategic actions to strengthen France’s economic position.