French finance minister urges caution as Paris agency proposes 30% China tariff

A growing debate in France over raising tariffs on China heated up on Monday, with a senior minister calling for a targeted approach even as a government planning agency proposed a blanket 30 per cent duty on all Chinese imports entering the European Union.

“They’ve been saying the right things. So far, I don’t think the numbers show that it’s happening,” Lescure said during a press briefing. “There’s been a lot of talk, but not much [in terms of] results yet.”

He said Paris was ready to play its part in rebalancing trade, which would require targeted tariffs to address instances of “obvious unfair competition”, but also policies to boost Europe’s savings rate, innovation capacity and competitiveness.

The comments came on the same day that France’s High Commission for Strategy and Planning published a report on the threat presented by China to European industry, which called for the imposition of a 30 per cent tariff on all Chinese goods or a 20 per cent to 30 per cent depreciation of the euro relative to the yuan to protect local producers.

The commission, set up in 2020 and expanded last year, is an advisory body designed to help the French government define its economic strategy. As France is a member of the EU’s customs union, any move to raise tariffs on China would need to be adopted on a European level and approved by EU authorities.

Clement Beaune, head of the commission, warned that European industry faced potential “destruction” amid intensifying competition from China unless action was taken. Chinese companies had rapidly climbed up the value chain and were now competing directly with Europe’s core industrial products, he said.

About one-quarter of France’s exports and one-third of Germany’s exports “appear to be directly threatened” by this competition, according to Beaune. In the medium term, up to 55 per cent of European manufacturing output could be at risk if current trends continued, the report said.