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U.S. sanctions to cost French companies one billion euros

Christian Fernsby |
United States economic sanctions against the European Union, approved by the World Trade Organization (WTO), will generate losses of one billion per year for French companies, Euler Hermes forecast.

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According to Stephane Colliac, an economist at the credit insurance company, the impact is less than initially believed, at 2.4 billion euros, due to the US tariff measures on European products from October 18, in the context of the Boeing-Airbus dispute.

According to the newspaper Le Monde, the expert set out that half of the damages would be to the aeronautical industry, with losses of 530 million euros in aircraft sales, a sector hit with 10 percent taxes from Washington.

Wine exports are also set to suffer losses of up to 370 million as a result of the payment of 25 percent in customs duties, followed by dairy products (60 million).

Colliac explained that the majority of aeronautical exports from France to the US would not be affected by the tariff increase, nor would cognac, champagne or pharmaceutical and chemical products.

Therefore, from the macroeconomic point of view, the sanctions would not impact excessively, but the risk of protectionism constitutes a continued threat to French firms, in a context in which the country has lost competitiveness in the last two decades, although it remains the second strongest European economy in various sectors, he stated.

Earlier this month, the WTO authorized the US to sanction the EU for its illegal subsidies to Airbus, which has become the world's leading manufacturer of commercial aircraft, measures that could amount to 7.5 billion dollars annually (6.8 billion euros).

The French Foreign Ministry expressed its regret over the White House's indifference in negotiating a solution, and announced that the bloc will respond firmly, according to the protection offered by the WTO itself, which would allow Brussels to adopt a similar measure, as it accuses Boeing of benefiting from more than 19 billion dollars in subsidies between 1989 and 2006.

This conflict has been on the agenda of the organization for 15 years, and the EU attributes to the US the unwillingness to work on an agreed solution to the trade dispute.

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