"A bad deal, but the least bad solution": Eric Lombard says France can still make it through the Trump deal

There's still room for improvement. The trade agreement between the European Union and the United States is "not complete" and "work continues," French Economy Minister Éric Lombard said on Monday, July 28, adding that "we will ensure it is improved."

"This agreement is not complete. There is a base, which is 15%, and exemptions that are not yet fully detailed," said Eric Lombard in an interview with the daily newspaper Libération, published on the newspaper's website Monday evening. "The work continues" because "the agreement is not finalized and we will ensure that it is improved."

As for exemptions, "it's certain for aeronautics and spare parts for this industry," he adds.

"Discussions must continue for pharmaceutical products - we understand that certain generics will be exempt -, on steel, on aluminum, on chemicals, on semiconductors and on wines and agricultural products."

As for spirits, the minister remains conditional. The French Minister Delegate for Foreign Trade, Laurent Saint-Martin, has already cited these goods among the exemptions provided for in the agreement, and the Federation of Wine and Spirits Exporters (FEVS) also wants to believe that the matter is settled. However, nothing had yet been decided as of Monday evening; discussions are continuing.

Asked about the other part of the agreement, namely the $750 billion in energy purchases and the $600 billion in investments in the United States, Eric Lombard replied that "Europe wants to end all dependence on Russian gas, which still supplies 20% of LNG (liquefied natural gas). The bulk of the $750 billion is aimed at this desensitization strategy."

As for the $600 billion investment, "this is an estimate of the investment flows expected until 2029 from European companies" but "it is a decision that belongs to private actors."

The minister believes that the agreement reached is the "least bad solution" and that the priority was to "put an end to the uncertainty that is penalizing our economy."

Faced with the US "offensive," Europe had no choice but to choose between bad solutions. This is a bad agreement, but the least bad solution.

As for the repercussions of the tariffs, "initial estimates indicate a modest impact on our economy," the minister said. "In the longer term, it's the reduced growth in the United States that could indirectly affect us," he said.

While the United States wanted to "call into question our rules," "together we were able to limit the debate to customs duties and then discuss their level, until it became clear that the basis for reaching an agreement was to accept duties of 15% with sectoral exceptions ," he explains.

According to Eric Lombard, "all things considered, this agreement is the one that will have the least negative impact on our economy."

Confirming the announcement "at the start of the school year" of a revision of the 2025 growth forecast, he emphasized that "we will see if the negative impact of the increase in customs duties is offset by the positive impact of the removal of uncertainty." The government's current forecast for 2025 is 0.7%.

"We have entered a world of economic predators," says Eric Lombard. And in his eyes, Chinese competition in industrial products is "even more worrying than the American attitude."