LVMH, which produces Moët & Chandon (yummy!) have fallen 1.5% on the Paris stock market.
Kering, which owns Gucci and Yves Saint Laurent, has shed 1.3%, while cosmetics company L’Oréal has dipped by 0.3%.
And if America really does impose this 1o0% tariff, it could mean less French champagne and quality cheese is quaffed and scoffed in the States.
of fears that Camembert will be off the menu, replaced with processed cheese (and you can’t bake in the oven with a little garlic and herbs!).
He told clients:
- US President Trump tweeted plans to tax US consumers of French champagne and cheese (and other goods). The sentiment seems to be “let them drink Coke.” Taxing trade is one of the few things the US president can do alone. Trump is branding the Democrats as “do nothing” – we may get more such tweets as a demonstration Trump is “doing something.”
- Substituting Kraft Cheese Slices for Camembert may be a heavy burden. However, earlier tweets re-imposing taxes on US users of Brazilian and Argentinian steel seem even more serious. Companies have spent years believing that they can operate global supply chains. Trust in global supply chains is threatened when a Trump trade deal does not seem to last more than a few months.
Mining companies are among the top fallers, with Anglo American losing almost 2%. A trade war can mean lower demand for commodities such as iron ore and coal.
Holiday firms TUI and Carnival, who are also vulnerable to a growth slowdown, are in the red too.
Junior economy minister Agnes Pannier-Runacher has declared that France will be “pugnacious” over the issue.
She told Sud Radio a little while ago that:
“It is very clear that we do not need to go back on this, with regards to a topic that economically speaking makes sense.
We need to be pugnacious on the subject.
(thanks to Reuters for the quotes)
Back in July, France decided to impose a new 3% levy on digital companies with global revenues of more than €750m (£685m). It is meant to tackle the issue of major American companies paying little corporation tax in Europe, because they declare most of the profits back in the US.
Finance minister Brune Le Maire has told Radio Classique that the move is “unacceptable”, and not what you’d expect from an ally.
Le Maire also warned that Europe would retaliate, presumable with its own raft of tariffs on American imports.
“In case of new American sanctions, the European Union would be ready to riposte”
So much for the season of goodwill! Donald Trump has spooked the financial markets again, with a fresh flurry of tariffs that further escalate his trade war war.
Overnight, the Trump administration on Monday proposed new tariffs up to $2.4bn of French goods. Prized exports, including champagne, cheese, handbags, porcelain, cheeses and yoghurt would incur a new levy of up to 100%.
This swingeing move is a retaliation against France’s new digital services tax, which Washington says unfairly discriminated against American technology companies such as Amazon, Google and Facebook.
US Trade Representative Robert Lighthizer declared that the move:
“sends a clear signal that the United States will take action against digital tax regimes that discriminate or otherwise impose undue burdens on US companies.”
The move casts a shadow over today’s meeting of NATO leaders in London, to celebrate the 70th anniversary of the military alliance.
The attack on French exporters came just hours after Trump announced he was raising tariffs on steel and aluminium from Brazil and Argentina, in retaliation for their currencies falling to record lows.
That knocked stocks across the globe, with European stock markets suffering their worst day in two months on Monday. Wall Street also suffered, with the Dow losing almost 1%.
The selloff is now spreading to Asia, where Australia’s S&P/ASX 200 has slumped by over 2%.
Hopes that Trump might secure a trade deal with China had driven markets higher in recent weeks; investors are now worrying that America could take a more belligerent approach. Tariffs restrict trade and drag on global growth, so any escalation is bad news for the global economy.
of says Trump’s latest barrage of tariffs has surprised the markets.
The US placing steel and aluminium tariffs on Argentina and Brazil caught markets off guard. Traders have had US-China trade tunnel vision. As Americans would say, this came out of left field.
The new tariffs in South America are a reminder that with Trump as US President, a phase one trade deal with China doesn’t mean global trade just resets to the old status quo.
As I type, France is vowing to hit back, so it could be a tense day....
- Expected to rise to 44.5, from 44.5, showing another contraction