France Elects Moderate Macron

France has elected pro-business candidate Emmanuel Macron, the country’s former economy minister, by a 2:1 margin to be its new president for the next five years.

The vote, which rejected the isolationist far-right policies of candidate Marine Le Pen, could translate into good news for local carmakers PSA Group and Renault SA. Macron has promised to cut corporate taxes and allow companies more flexibility in their ability to raise and lower their employment levels.

The defeat of Le Pen also ends the threat of a possible trade war. She vowed to pull France out of the European Union and coax domestic carmakers to move foreign production to France by raising levies on imported goods.

Le Pen had praised U.S. President Donald Trump’s similar plan to repatriate car production in Mexico and elsewhere through a combination of domestic tax breaks and heavy tariffs on imported goods. France’s economy has been growing slower than the EU overall, and its unemployment rate has remained relatively high at about 10%. Le Pen blamed internationalism.

But Macron's support of French carmakers has been mixed. As economy minister under former Socialist party President Francois Hollande, he pushed the government to hike its stake in PSA to 14% to help is avoid bankruptcy. Yet he also sought to trim CEO Carlos Ghosn’s compensation and engineered a secretive government move that raised its voting stake in Renault to 20% and block an attempt by the company’s board to liberalize its voting rules for shareholders.