France faces a double whammy of an internal fiscal crisis and external trade pressure. With the Donald Trump administration's new tariff policy taking aim at France's core export industries, warnings that the government has run out of fiscal firepower to defend them have put the Élysée Palace on high alert.
According to Le Monde, France's exports of wine and spirits to the United States in 2025 plunged 21% from a year earlier, recording a loss of €3 billion (about 5.115 trillion won). Alexandre Sauboë, head of the French Industry Federation, said, "The industry has been thrown into chaos, having to revise price tags again." A disadvantageous exchange rate for the tariff has piled on, pushing U.S. retail prices up roughly 10%–30%. The United States remains the largest market for French wine, but local demand has rapidly frozen as it hits a price resistance line.
To make matters worse, France's domestic economy has hit its limits. The fiscal ammunition to fend off external attacks has been exhausted. Bloomberg News reported on the 19th, citing a report by the Cour des Comptes, that the government's liability reduction plan is "very uncertain." Pierre Moscovici, head of the Board of Audit and Inspection, said, "The government's deficit reduction target lacks concrete expense-cutting measures," warning that "France's fiscal credibility is standing at the edge of a cliff." France's fiscal deficit currently exceeds 5% of gross domestic product (GDP), and its liability ratio has surpassed 110%, ranking among the highest risk levels in the European Union (EU).
France's liability swelled like a snowball through the war in Ukraine and the COVID-19 period. The expenditure increased at the time to stimulate the economy has become a rigid budget that is shackling the government. This means there is no capacity to inject subsidies to support corporations in what is effectively a trade war phase, and instead austerity and tax hikes are inevitable, a prospect that will intensify the pain for corporations.
Experts worry that if France fails to overcome this internal and external crisis, the entire eurozone could lose its growth engine. The French government is exploring a joint response, including triggering the European Union's "anti-coercion instrument," but between an empty treasury and blocked export routes, the Élysée Palace's options are narrowing.