French equities face a sharp internal rotation if President Trump escalates tariffs on European allies, with export-heavy sectors most exposed. Kepler Cheuvreux identifies automakers, capital goods, and chemicals as primary losers, while domestic-focused companies could become relative havens. This follows a 15% baseline tariff on EU goods since August 2025.

The analyst notes that U.S. tariffs could rise to 25% by February 2026 and 40% by June, directly undermining price competitiveness. Mid-cap French companies with limited U.S. exposure would be less sensitive. Sectors like fragrances and beauty might show resilience through pricing power, though likely at the cost of margin compression rather than full insulation.

Kepler highlights defence, aerospace, and critical infrastructure as potential beneficiaries due to higher earnings visibility and lower trade shock exposure. Their preferred stocks include Exail Technologies and Compagnie des Alpes. A sustained tariff hike would likely split the French market, favouring domestic and sovereignty-linked names over U.S.-dependent exporters.