Delayed Effects of US-EU Trade Frictions Begin to Emerge

BusinessEurope released a survey indicating that while the direct impact of the current US-EU trade tensions on Eurozone economic growth remains relatively limited so far, their negative effects are expected to intensify significantly by 2026. The organization warned that if the two sides fail to establish a de-escalation mechanism before the end of this year, it could trigger a series of chain reactions next year, including investment contraction, reduced production capacity, and pressure on the job market.

According to the survey data, thanks to preemptive measures taken by businesses—such as adjusting supply chains, securing raw materials, and diversifying markets—the trade friction is projected to narrow the Eurozone's economic growth by only about 0.03 percentage points in 2025. However, as the effectiveness of these temporary strategies gradually wanes and delayed investment effects materialize, the drag on economic growth from this friction is forecast to rise substantially to 0.5-0.6 percentage points by 2026.

BusinessEurope emphasized that the buffer measures currently relied upon by companies are distinctly short-term in nature and difficult to sustain over the long run. If policy uncertainty persists, businesses will struggle to maintain their current investment and production pace, thereby exerting substantial pressure on the overall economic performance.

The organization did not disclose specific sectoral or country breakdowns in its report, nor did it specify the precise policy triggers for the US-EU trade friction. Details of relevant tariff measures and progress in negotiations have not yet been disclosed.

Currently, the US and EU have not issued a new joint statement regarding easing trade tensions. BusinessEurope calls on the relevant parties to accelerate the dialogue process to prevent 2026 from becoming a critical point where trade friction severely undermines the real economy.