French government set to lower growth target as Trump tariffs loom

The French government is preparing to lower its growth forecast for this year, said work minister Astrid Panosyan-Bouvet on Wednesday.

"We're more likely to be looking at 0.7%, which is the Bank of France's growth forecast," said the junior minister, interviewed by media channel France 2.

That’s a revision from the state’s current prediction of 0.9%, used as a basis for France’s yearly finance bill.

It also comes after economy minister Éric Lombard said on Tuesday that the government’s forecast would be lowered in the near future.

"We are in a delicate economic situation," said Lombard during a question session at the National Assembly, adding that there are “clouds” on France’s fiscal horizon.

The Bank of France trimmed its annual growth outlook in mid-March from 0.9% to 0.7%, compared to a growth rate of 1.1% in 2024. The total is set to reach 1.2% in 2026 and 1.3% in 2027, said the bank.

The revision takes into account the “uncertain context” created by tariffs proposed by the Trump administration, yet it does not directly consider the increase in customs duties on Mexico and Canada currently under discussion. Nor does it account for trade measures announced in recent weeks—for instance on European goods.

Trump has suggested a tariff of up to 25% on all EU goods, with details set to be announced later on Wednesday. While France is not expected to be the hardest hit country in Europe, the nation still sends a significant proportion of goods to the US. 

In 2023, the US was France's fourth-largest customer—following Germany, Italy, and Belgium—and its fifth-largest supplier. Vulnerable parties include France’s aeronautical, pharmaceutical, and beverage industries, which respectively exported goods worth €7.9 billion, €4.1bn, and