French industry morale fell unexpectedly in October to its lowest level since early 2015 as France and its European partners became the latest target of US trade actions, a monthly survey showed on Wednesday.
Until now France's industrial sector had resisted a slowdown that has hit German industry particularly hard as it is far more dependent on exports.
However, France found itself this month dragged into the middle of global trade frictions as Washington prepared to hit a range of European Union goods with tariffs after winning WTO clearance in a long-running dispute over Airbus subsidies.
France's INSEE official statistics agency said its index of industrial morale dropped to 99 points this month from 102 in September, hitting the lowest level since March 2015.
It also fell markedly short of expectations for an average reading of 102, with estimates in a Reuters poll of 18 economists ranging from 103 to 101.
INSEE said its overall index of business confidence fell marginally to 105 points from 106 in September, comfortably above the long-term average of 100.
While industry morale plunged, the index in the service sector, which is much less exposed to the vagaries of international trade, was steady at 106.
"The trade war is clearly weighing on business sentiment, and the new tariffs against some French products are a negative in that respect," said Gilles Pradere, senior fixed income manager at Geneva-based firm RAM Active Investments.
"But there are certainly other factors at play such as the transition in the auto sector due to new regulations and a slowing Chinese economy," he added.
Despite warnings from Paris that the EU would retaliate, the United States on Friday pressed ahead with 10% tariffs on Airbus planes, which are one of France's biggest exports and support a network of suppliers across the country.
Washington also levied 25% duties on a range of products, including French wine, Scottish whisky and cheeses from across Europe.
While Germany's industrial slump has pushed Europe's biggest economy to the brink of recession, France's economy has so far held up well, boosted by strong demand at home thanks to an improving job market and purchasing power gains for consumers.
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