France lowers growth outlook as trade war bites: Economy Minister
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The French Minister of Economy announced that the government's growth projections took a downward turn amid Trump's new tariffs, which sent a shock through the global economy.
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Economy Minister Eric Lombard during a visit to Wandercraft, a company that manufactures exoskeletons, in Paris on March 13, 2025 (AFP)
Amid escalating global trade tensions, French Finance Minister Eric Lombard announced a downward revision to the government's 2025 growth projections on Wednesday.
French Finance Minister Eric Lombard stated on television channel TF1 that the euro zone's second-largest economy is now projected to grow by just 0.7% in 2025, down from the 0.9% forecast originally used for budget planning, while emphasizing the government's determination to maintain its deficit reduction targets despite the revised growth outlook.
Acknowledging the worsening economic outlook, Lombard affirmed the government's commitment to cutting the public sector deficit to 5.4% of GDP this year—down from 5.8% in the previous year—while stressing that achieving this target would necessitate identifying additional budget savings.
This comes as Trump's tariffs send a jolt through the global economic system, including the European Union, which Trump hit with a 34% tariff on April 4, which he dubbed "Liberation Day."
France forecasts 0.5% GDP drop as US tariffs bite: PM
France's Prime Minister Francois Bayrou warned Saturday that U.S. President Donald Trump's tariffs could slash the country's GDP growth by 0.5 percentage points, according to an interview published on April 5.
"Trump's policies could cost us more than 0.5% of our GDP," Bayrou told Le Parisien, adding that "The imposition of these outrageous tariffs will lead to a global crisis... The risk of job losses is significant, as is that of an economic slowdown."
Previously, French Economy Minister Eric Lombard suggested that the European Union's response to the United States' newly-imposed 20% tariffs might extend beyond simply imposing reciprocal duties on American imports, in an interview with RMC Radio on April 4.
"We are working on a response package that could indeed go beyond customs duties to bring the Americans to the negotiating table and reach a balanced agreement..." he told the radio channel, adding that the EU's response can be firm without mirroring the US approach., as tariffs on imports from the US could harm the bloc.
Urging French businesses to show both solidarity and patriotism in response to the US tariffs, the minister emphasized that Europe must assert its position firmly against major global powers, warning that we have entered an era of confrontation with the world's dominant blocs—the US, Russia, and China—while expressing confidence that Europe possesses the necessary capabilities to meet this challenge, provided it mobilizes the required effort.
