French lobby head urges action to make business more competitive as tariffs kick in

By Dominique Vidalon and Sudip Kar-Gupta

PARIS (Reuters) -The head of France's Medef business lobby group warned on Wednesday that sweeping U.S. tariffs could hit economic growth and lead to a recession, and he urged authorities to act to make French businesses more competitive.

"The risk is that growth will stall and that we go into a recession," Patrick Martin told RTL radio when asked about the impact of U.S. tariffs on French businesses.

U.S. President Donald Trump's "reciprocal" tariffs on dozens of countries took effect on Wednesday, including massive 104% duties on Chinese goods, deepening his global trade war even as he prepared for negotiations with some nations.

"We must very rapidly act to improve the competitiveness of French businesses... This means protecting consumption, notably not over-burdening taxpayers, households as well as businesses," Martin said.

When asked about Martin's demand, French industry minister Marc Ferracci told Franceinfo radio: "We are discussing that in parliament. This means raising the issue of lowering taxes, notably production taxes."

Ferracci also reiterated a call for French companies to suspend investments in the United States, given the clashes between France and Europe with Trump's administration over tariffs.

"We are saying suspend your investments given this very complicated moment in time. We are currently in a situation of high confusion. Investments that had been foreseen have now been made uncertain," Ferracci said.

Ferracci, who met late on Tuesday with representatives from French industry, said it was paramount to analyse the likely impact of the tariffs on sectors such as aerospace, cosmetics, aeronautics or luxury goods in order to calibrate the European Union's response.

That response must be "firm and proportionate" to avoid an escalation that would hit jobs, he added.

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta and Hugh Lawson)