France Sees 30% Surge in Factory Closures amid Rising Energy Costs, Tariffs

Factory closures in France jumped 30% last year, as domestic manufacturers struggled under the combined pressure of rising energy costs, U.S. tariffs, and increased competition from Asian markets.

Up to 160 factories closed in 2025, compared with 121 in 2024. Only 103 new factories were opened in 2025, down from 115 the previous year.

The closures predominantly affected food and agricultural industries, transportation, consumer goods, and construction, with large firms including ArcelorMittal and automotive supplier Valeo shutting plants after experiencing falling demand.

The French Ministry of Finance highlighted that rising electricity and fuel costs, exacerbated by global energy market instability following the Iran conflict, intensified the financial strain on manufacturers. U.S. tariffs on European exports added another layer of challenge, particularly for heavy industry and automotive suppliers.

ArcelorMittal reduced 600 jobs across seven northern France sites due to falling steel demand in Europe.

Moreover, Arkema, a French chemical company, shuttered certain operations domestically. Also, Valeo closed two plants, citing competition from cheaper Chinese imports and declining automotive sales.

Officials warned that deteriorating global economic conditions are putting significant pressure on the French industrial sector, urging policymakers to consider measures to maintain competitiveness and sustain industrial employment.

The Ministry noted that the statistics do not account for the scale of each facility: large battery production plants and small startup workshops are counted equally in closure tallies.