The sudden enhance from the “tariff shield” to French corporations | EUROtoday

The announcement, on February 6, of a discount in France’s commerce deficit could have come as a shock, in a local weather of common financial gloom: cascading failures, weak consumption, rising unemployment and stalled reindustrialization. Our international commerce in items, nevertheless, exhibits indicators of restoration, their deficit having elevated from roughly 79 to 69 billion euros over one yr. And, above all, France’s export market shares have stopped crumbling as they’ve been doing because the 2000s.

If a part of this divine shock is because of the fall in oil costs, one other is to the credit score of Bercy, who in all probability didn’t hope for a lot. More exactly, the tariff defend, this method put in place by the finance legislation for 2022, and renewed in 2023, to counter the surge in vitality costs, following the Russian invasion of Ukraine. The goal was, then, to cut back inflation and keep away from seeing the buying energy of households collapse below the load of fuel, electrical energy, gas payments and likewise every day groceries whose costs comply with manufacturing prices.

This system labored properly, even when customers didn’t essentially understand it. Inflation has been far more contained in France than elsewhere. From 2022, it was 6.4% in France, in comparison with 8% in Italy, 8.3% in Germany, 10.3% in Belgium and 12% within the Netherlands. “ Inflation has been in double digits in many countries », recalls Xavier Debrun, who is to take over from Olivier Garnier as chief economist of the Banque de France. This trend continued in 2023 and 2024. At the end of 2025, the price increase over one year was only 0.7% in France, compared to 1.8% in Germany, which also went through two years of recession.

Improvement in trade deficit

But this device had another effect which was not anticipated. “ The main virtue of the shield was to defuse the price-wage loop at a time when inflation was highest, which made it possible to avoid a significant increase in labor costs. », Welcomes the Center for Economic Research and its Applications (Cepremap), an institution placed under the supervision of the Ministry of Research, in a note from November 2022. When inflation is very high, in fact, companies are more or less forced to raise salaries in the same proportions under pressure from unions. This contagion is part of what economists call the “second round effects” of inflation.

You have 55.89% of this text left to learn. The relaxation is reserved for subscribers.