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Trade war: France hits back over US tariff threat on cheese and champagne - business live Trade war: France hits back over US tariff threat on cheese and champagne - business live
(32 minutes later)
Rolling coverage of the latest economic and financial news, as US proposes steep new tariffs on French food, drink, handbags and porcelainRolling coverage of the latest economic and financial news, as US proposes steep new tariffs on French food, drink, handbags and porcelain
Critics of trade wars point out that tariffs are effectively a tax on consumers, as they make imports more expensive.
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.
Paul Donovan of UBS fears that Camembert will be off the menu, replaced with processed cheese (and you can’t bake that 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.
Britain’s FTSE 100 index has opened lower, as trade war jitters ripple through the City.
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.
Paris is also refusing to abandon its new digital tax plan, despite America’s threats.Paris is also refusing to abandon its new digital tax plan, despite America’s threats.
Junior economy minister Agnes Pannier-Runacher has declared that France will be “pugnacious” over the issue.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:She told Sud Radio a little while ago that:
(thanks to Reuters for the quotes)(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.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.
The French government is furieux about America’s threat to impose a 100% tariff on some of its most cherished exports.The French government is furieux about America’s threat to impose a 100% tariff on some of its most cherished exports.
Finance minister Brune Le Maire has told Radio Classique that the move is “unacceptable”, and not what you’d expect from an ally.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.Le Maire also warned that Europe would retaliate, presumable with its own raft of tariffs on American imports.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
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.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%.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.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:US Trade Representative Robert Lighthizer declared that the move:
The move casts a shadow over today’s meeting of NATO leaders in London, to celebrate the 70th anniversary of the military alliance.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.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%.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%.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.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.
Jasper Lawler of London Capital Group says Trump’s latest barrage of tariffs has surprised the markets.Jasper Lawler of London Capital Group says Trump’s latest barrage of tariffs has surprised the markets.
As I type, France is vowing to hit back, so it could be a tense day....As I type, France is vowing to hit back, so it could be a tense day....
The agendaThe agenda
9.30am GMT: UK construction PMI for November: Expected to rise to 44.5, from 44.5, showing another contraction9.30am GMT: UK construction PMI for November: Expected to rise to 44.5, from 44.5, showing another contraction