French Markets React Positively to EU-US Customs Deal Amid Economic Concerns
The CAC 40 rises as a new EU-US customs agreement takes effect, but analysts warn of economic challenges ahead.
- • CAC 40 index rose 1% to 7,873.63 points after tariff agreement announcement.
- • EU-US customs deal reduces tariffs on EU goods to 15%.
- • Analysts warn of potential negative impacts on demand and profits.
- • EssilorLuxottica's stock rose by 5.44% while Stellantis reported a 2.3 billion euro loss.
Key details
On July 29, 2025, the Paris stock exchange reported a significant uptick, with the CAC 40 index climbing 1% to 7,873.63 points following the announcement of a customs tariff agreement between the European Union and the United States. This deal reduced tariffs on EU products exported to the US from a potential 30% to a more manageable 15%. While this agreement has sparked enthusiasm in the markets, analysts from Nomura caution that even this lower rate could have detrimental effects on the French economy through decreased demand and tighter profit margins.
Notably, the agreement has created mixed sentiments, as it is viewed as a necessary compromise amidst tough negotiations, according to Brussels officials. This move is particularly important as investors are beginning to shift their focus back to critical economic indicators and the forthcoming monetary policy decisions from the Federal Reserve.
In corporate news, French company EssilorLuxottica reported a positive performance with a 5.44% rise in stock, attributed to a 7.3% increase in activity bolstered by innovative products, such as the Ray-Ban Meta glasses. Conversely, Stellantis faced a stark decline in its stock by 3.18% due to a significant net loss of 2.3 billion euros in the first half of 2025, contrasting sharply with a profit of 5.6 billion euros reported the previous year. The reactions portray a market grappling with the potential implications of the customs deal while navigating the complex landscape of corporate performances.