with Donald Trump in the White House, customs duties risk increasing

Donald Trump, if he is re-elected to the White House, which Wednesday morning is very likely, wants to tax all imported products and establish a universal tax of 10 to 20% on all products manufactured abroad.

For the European and French economy in particular, the issue behind this election is in one word: “customs duties”. The most beautiful word in the dictionary, according to Donald Trump, on his way to becoming the 47th President of the United States, Wednesday November 6 in the morning. He wants to tax all imported products and establish a universal tax of 10 to 20% on all products manufactured abroad. Even if Donald Trump mainly has his sights set on customs duties on Chinese products, which he wants to tax up to 60% to protect the American automobile, a symbol of power of the United States, Donald Trump wants to go as far as '100% tax on all imported cars, regardless of their country of origin, not just Chinese.

The Trump years left some bad memories. They had been those of punitive taxes on our products. The European Union was imposed customs duties on steel and aluminum in 2018, in retaliation for the Gafa tax, duties finally suspended in 2021. The Trump government had also decided to impose customs tariffs 25% on certain imported French products,
there was a whole list on imports of planes, handbags and cosmetics, cheese,
of coffee and olives, according to a list published by the services of the United States Trade Representative (USTR). There was a moratorium on several products with the arrival of Joe Biden. A return to the billionaire's business raises fears of a return of a very harsh protectionist policy which will reshape international trade relations.

If we stay in the automobile sector, we will be less affected than the Germans who sell a lot of cars in the USA, but in France, the return of Donald Trump would be a hard blow for the wine and spirits industry, we think. to cognac exports already well affected by Chinese customs duties, or to luxury goods, a big, very big market from France to the USA. Decisions which promise to affect our flagships like LVMH or Kering which, as we have seen with the latest results, are weakening due to the slowdown in Chinese growth.

We must keep in mind that Donald Trump or Kamala Harris have the same commercial enemy: China and whoever wins will therefore put pressure on Europe so that the old continent restricts its trade with China. Both will also continue IRA subsidies to American industry.
If she had been elected Kamala Harris would have continued what Joe Biden did by largely helping the American economy, with the Inflation Reduction Act plan, put in place in summer 2022, a massive aid program by the United States to support the companies in the energy transition sector, Washington was then trying to react to China's subsidies to its industry and launch its own green strategy, “without even imagining the potential consequences for the rest of the world”,

Controversial subsidies in Europe, because they attract investments, our capital, our factories to the USA, and therefore weaken our industries. The EY firm has brought back the IRA to explain part of the decline in the number of American investment projects in Europe, which according to it fell by 15% between 2022 and 2023. The same goes for the price of energy, c This is a very important competitive advantage on the Americans' side which will not change and penalizes our businesses, particularly the smallest.