PARIS (Reuters) – French Finance Minister Bruno Le Maire said on Thursday that resolving trade sanctions was his priority with the incoming U.S. administration in order to keep a trade war from adding to the economic pain from the coronavirus pandemic.
U.S. President Donald Trump’s administration hit France with tariff duties on wine after failing to resolve a 16-year dispute over aircraft subsidies with the European Union. It also threatened to impose tariffs on French cosmetics, handbags and other imports over Paris’ digital service tax on big internet companies.
“The consequences of trade sanctions on our economy are very negative and very detrimental. We already have the pandemic crisis,” Le Maire said in an interview at the Reuters Next conference.
“We should not add any kind of difficulties to this very difficult economic situation. A trade war is not in the interests of the U.S. and not in the interest of Europe.”
Le Maire said that he had received no “initial signals” from the Biden administration about how it would deal with trade, but that he hoped to visit Washington in February.
If the Biden administration gives its support, Le Maire said stalled talks among nearly 140 countries to rewrite the rules of international taxation could be revived at the Organisation for Economic Co-operation and Development (OECD) and wrapped up within six months.
Trade tensions with Washington have added to the clouds hanging over the French economy in the last year, as it was already struggling with its deepest downturn since World War II.
The U.S. government this week began collecting new duties on certain non-sparkling wines as well as cognacs and other brandies from France, adding to the pressure on the economy as it struggles with a slow start to its vaccination programme.
Despite a weak start to the year, Le Maire said that his forecast for 6% growth in 2021 remained within reach and that he was confident of a strong recovery in the second half of the year.
“We have to remain humble and cautious because we have been fooled by the virus many times,” he said, adding that he was not worried about the initially slow roll-out of the COVID-19 vaccine in France.
Though the crisis has left France with a record level of debt, equivalent to more than 120% of economic output, Le Maire said the time to reduce it would only come after the crisis is over.
While debt reduction would require on the one hand the return of economic growth, he said it would also need reforms like an unpopular pension overhaul that got shelved at the start of the pandemic.
While acknowledging that public spending would eventually need to be reined in, he said that France’s 2024 Olympic Games must go on.
“People also need dreams and I think that the Olympic Games are a dream that can have a very positive effect on the French population,” he said.
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Reporting by Christian Lowe; Writing by Leigh Thomas; Editing by Richard Lough, Alison Williams and Hugh Lawson