Today, the European Commission published guidelines to assist providers and deployers of artificial intelligence (AI) systems in meeting the AI Act’s transparency obligations, which start to apply on 2 August 2026.
Transparency obligations will help people recognise when they are interacting with AI or when content has been generated or altered by AI, reducing the risk of deception and manipulation. The guidelines published today clarify which providers and deployers must comply with the transparency obligations for interactive AI systems and the marking and labelling of AI-generated content.
AI Act transparency obligations
Under the AI Act, AI providers will have to design AI systems to inform users when they are directly interacting with an AI and they will have to add machine-readable marks to enable the detection of AI-generated or manipulated content.
Deployers will also have to inform users when they are exposed to deep fakes, to AI-generated content on matters of public interest without human review or editorial control, and to emotion recognition or biometric categorisation systems.
The guidelines explain certain concepts, give exemptions and examples. These include what constitutes directly interactive AI systems, such as chatbots, synthetic content, including partially or fully AI-generated text, deepfakes, and AI-generated text on matters of public interest, as well as examples for relevant exceptions such as standard editing, e.g. spelling and grammar correction.
Finally, the guidelines explain how compliance with the transparency obligations of the AI Act may be demonstrated, including through adherence to a code of practice, which provides legal certainty and a simple and practical way to demonstrate compliance with the AI Act.
Background
The Commission’s Guidelines on the AI Act’s transparency guidelines complement the Code of Practice on Transparency of AI-generated content.   The Code of Practice was drafted by independent experts with input from hundreds of stakeholders. The Commission and the AI Board confirmed that the Code is an adequate, voluntary means which the providers and deployers of AI can rely on to demonstrate compliance with the AI Act.
To help organisations better understand their AI Act obligations, the Commission is putting in place a range of tools, including guidelines, the Code of Practice, and also the AI Act Service Desk, an accessible, up-to-date information hub offering clear guidance on the AI Act.
Next steps
On 2 August 2026, the majority of rules laid down in the AI Act start to apply, including the enforcement powers of the Commission and of national market surveillance authorities.
AI systems placed on the market before August will have to comply with the marking and detecting obligations from 2 December 2026.
 
 
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Enforcement Milestone Marks Strategic Pivot from Administrative Fines to Criminal and Civil Accountability Across the Global Supply Chain

The Department of Justice announced today that the Trade Fraud Task Force (TFTF), launched in August 2025, with the Department of Homeland Security (DHS) has surpassed $1 billion in civil and criminal recoveries, penalties, forfeitures, and publicly charged losses in less than one year This milestone reflects a fundamental shift in the federal government’s approach to customs and trade enforcement, emphasizing rigorous criminal prosecution and civil enforcement under the False Claims Act (FCA).
“For too long, fraud actors have viewed customs violations as a mere surcharge or cost of doing business,” said Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division. “By utilizing the Department’s full weight, we are making it clear that trade fraud is a serious economic crime. This billion-dollar milestone demonstrates that the United States and the National Fraud Enforcement Division will no longer allow the integrity of our country’s borders and markets to be compromised for illicit profit. This message should be heard loud and clear by all supply-chain actors.”
The TFTF was established by DOJ and DHS to investigate and prosecute those who defraud the government through material misrepresentations to U.S. Customs and Border Protection (CBP), including transshipment, mislabeling, and false declaration. Its mandate covers the entire supply chain, including importers, customs brokers, downstream distributors, industrial and commercial end-users, and other supply-chain actors who knowingly profit from merchandise imported contrary to law. Although the TFTF maintains broad enforcement authority,  the task force focuses on key revenue and enforcement priorities, including the evasion of Section 301 tariffs, antidumping duties (AD), and countervailing duties (CVD), the eradication of forced labor from global supply chains that seek to exploit U.S. markets, and the prosecution of criminal violations concerning imported goods that threaten public health and safety. By prioritizing clear, high-impact enforcement actions within established legal frameworks, the TFTF ensures swift accountability and a level playing field for law-abiding American businesses.
“Ensuring that the global supply chain remains a level playing field for law-abiding American businesses is a critical component of CBP’s mission,” said U.S. Customs and Border Protection Commissioner Rodney S. Scott. “By pairing CBP’s operational reach with DOJ’s prosecutorial authority, we are dismantling the networks that seek to bypass our laws and undermine our economic security. Every day, CBP confronts criminal networks that exploit our supply chains, endanger American families with unsafe goods, threaten the integrity of our consumer and industrial markets, and undermine confidence in international commerce. Our message is clear: those who seek to exploit America’s trade system will be identified, investigated, and brought to justice.”
“Through the Trade Fraud Task Force, Homeland Security Investigations is actively protecting American families and businesses from the dangers and consequences of illegal trade practices,” said Homeland Security Investigations Acting Executive Associate Director John A. Condon. “HSI combines investigative expertise and global partnerships to confront criminal networks that threaten fair trade and the security of our nation’s economic interests. By holding offenders accountable, we build trust in the products people rely on every day and support a fair marketplace for honest businesses.”
U.S. ATTORNEY’S OFFICE ANNOUNCES CHARGES IN TWO SIGNIFICANT CHICAGO TRADE FRAUD CASES
The United States Attorney’s Office for the Northern District of Illinois (NDIL) today announced charges against multiple defendants in significant customs duty evasion schemes involving the false declaration of countries of origin for gold jewelry. The Trade Fraud Task Force (TFTF) has selected NDIL as its lead prosecutorial partner. These Chicago cases contributed to the TFTF surpassing the $1 billion milestone in enforced trade fraud matters.
Raj Kohli and Veena Kohli, who operate Surya International, Inc., a gold jewelry importer and wholesaler in South San Francisco, California, were charged in U.S. District Court in Chicago with falsely declaring that the gold jewelry they imported into the United States had originated in Singapore and not its true country of origin—India and United Arab Emirates. The charges allege that from approximately August 2020 through May 2024, the company, together with foreign manufacturers and other United States entities, imported and brought into the United States approximately 563 separate entries of gold jewelry that were falsely declared as having been manufactured in Singapore and in doing so avoided paying customs duties of between 5.5% and 5.8% of the declared value of the imported gold jewelry. The gold jewelry had an estimated total value of more than approximately $693 million, thus causing the avoidance of more than approximately $38 million in United States customs duties.
Separately, Narain Gulabani who owned and operated Barkha Wholesale, Inc., a gold jewelry importer and wholesaler in Naperville, Illinois, was charged in U.S. District Court in Chicago with falsely declaring the country of origin for imported gold jewelry. The charges allege that, from approximately May 2016 and October 2021, Gulabani, together with foreign manufacturers and other United States entities, imported or caused to be imported into the United States approximately 242 separate entries of gold jewelry that were falsely declared as having been manufactured in Oman or Singapore and in doing so avoided paying customs duties of between 5.5% and 5.8% of the declared value of the imported gold jewelry. The gold jewelry had an estimated total value of more than approximately $240 million, thus causing the avoidance of more than approximately $13.6 million in United States customs duties.
These charges are part of a broader federal effort to combat trade fraud schemes that undermine fair competition, harm domestic industries, deprive the United States of substantial revenue, and ultimately hurt the American taxpayer.
CRIMINAL AND CIVIL ENFORCEMENT
The TFTF has a nationwide mandate to investigate and prosecute trade fraud and related cases, from coast-to-coast. Any offense involving the importation of an object may be inquired of and prosecuted in any district from, through, or into which the imported object moves. Moreover, federal law criminalizes down-chain activities involving merchandise entered contrary to law when done with knowledge of the illegal entry. As a result, the port of entry is only the starting point for these actions, which may also be prosecuted in the district that feels the impact of the trade fraud.
The TFTF has secured major victories across a diverse range of industries. Recent high-impact matters include:

Perfectus Aluminum (May 12, 2026) (CDCA): S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI)-led criminal investigation resulted in the collection of $549.5 million through a FCA settlement concerning massive scheme to evade antidumping and countervailing duties on aluminum extrusions.
Boise Cascade (April 27, 2026) (SDFL): HSI-led criminal investigation resulted in a $6.3 million fine and guilty plea for Lacey Act violations where the company demonstrated willful blindness toward illegally imported birch plywood.
Ceratizit USA (December 18, 2025) (EDMI): $54 million FCA settlement to resolve allegations of knowingly failing to pay duties on tungsten carbide products imported from China.
Royal Sovereign (April 28, 2026) (DNJ): $8 million criminal fine and restitution ordered after failure to report to the U.S. Consumer Product Safety Commission dangerously defective imported air conditioners allegedly linked to more than 40 fires and one death.
MGI International (December 12, 2025) (DNH): HSI-led criminal investigation leading to resolutions against a global plastic resin distributor and its former executive concerning misrepresentations of the goods’ country of origin to avoid paying Section 301 duties.

CBP ENFORCEMENT
In addition to the civil and criminal enforcement efforts that led to this historic milestone, CBP continues to exercise its enforcement authorities to address trade violations. So far this Fiscal Year, CBP has assessed more than $2.1 billion in commercial trade penalties and debarred 35 parties from doing business with the federal government. These actions complement DOJ’s enforcement mechanisms and strengthen CBP’s mission to protect our national and economic security by preventing fraud, waste, and abuse.
THE TRADE FRAUD RESOURCE GUIDE
The DOJ and the DHS today released A Resource Guide to Trade Fraud Enforcement (the Guide). As the first joint comprehensive framework of its kind, the Guide is a historic and seminal roadmap for cross-border compliance and enforcement priorities. The Guide provides critical information to enterprises of all sizes and addresses a wide variety of topics, including who and what is covered by customs regulations and anti-trade fraud laws and the different types of civil and criminal resolutions available in trade fraud enforcement. On these and other topics, the Guide takes a multi-faceted approach toward setting forth the statutory and regulatory requirements and providing insights into the enforcement practices of the DOJ and DHS.
Since January 2025, the Department has brought trade fraud enforcement actions all over the country as shown in the map below:

“When companies commit trade fraud, the prosperity and safety of American workers, families, and communities are put at risk,” said the DHS Assistant Secretary for Trade and Economic Security, Aris Kourkoumelis. “To level the playing field and protect the American people, DOJ and DHS have forged the Trade Fraud Task Force and have produced this Resource Guide which provides the private sector with a transparent, comprehensive manual on trade fraud enforcement.”
GLOBAL TRADE & COMMERCE ENFORCEMENT SECTION
The Department is announcing the creation of the Global Trade & Commerce Enforcement Section (GTCES) within the National Fraud Enforcement Division. The GTCES’s mission is to investigate and prosecute criminal import, trade, and other fraud offenses that undermine American industries, evade external revenue collection, threaten consumers’ health and safety, finance foreign adversaries, promote forced labor through illegal trade practices, and violate United States laws and regulations governing domestic and foreign commerce.
A FOUNDATION OF PARTNERSHIP
The success of the GTCES and TFTF is built upon unprecedented cooperation between Main Justice, U.S. Attorneys’ Offices, and law enforcement partners.
“It has been a tremendous honor to work closely with the Department and its leadership to envision what the Trade Fraud Task Force could be, and then to convert concept into reality,” said U.S. Attorney Andrew S. Boutros of the Northern District of Illinois. “Helping stand up the Task Force from the ground up has been a vision of mine for nearly 20 years, dating back to when I was a federal prosecutor in Chicago bringing what has still stood as the largest criminal trade fraud cases of their kind and doing so against a stacked deck. It is deeply satisfying to know that we were decades ahead of our time and that our strategy from years ago has now been adopted at the highest levels of the Department and is being implemented across the whole of government. It is a great privilege and responsibility for the Northern District of Illinois to be selected as lead prosecutorial partner for the Trade Fraud Task Force. With our expansive venue and my decades of experience in this space, the Chicago U.S. Attorney’s Office intends to be the tip of the spear when it comes to robust and vigorous enforcement of our nation’s trade, forced labor, and other related laws. There should be no doubt, the key roads for trade fraud enforcement lead from, to, and through Chicago past, present, and future.”
The Department extends its gratitude to the 35 TFTF masthead U.S. Attorneys’ Offices: District of Arizona, Eastern District of Arkansas, Northern District of California, Central District of California, Eastern District of California, Southern District of California, District of Colorado, District of Columbia, Southern District of Florida, Northern District of Georgia, Central District of Illinois, Northern District of Illinois, Southern District of Illinois, Northern District of Indiana, Southern District of Indiana, District of Maryland, District of Massachusetts, Eastern District of Michigan, Western District of Missouri, District of Nebraska, District of New Jersey, District of New Mexico, Eastern District of New York, Southern District of New York, Middle District of North Carolina, District of Oregon, Eastern District of Pennsylvania, District of Puerto Rico, Middle District of Tennessee, Western District of Tennessee, Northern District of Texas, Southern District of Texas, Eastern District of Virigina, Eastern District of Wisconsin, and Western District of Wisconsin.
The Task Force also acknowledges the indispensable contributions of its law enforcement and agency partners, including CBP, HSI, IRS Criminal Investigation, the Environmental Protection Agency’s Criminal Investigation Division, the U.S. Fish and Wildlife Service, the Consumer Product Safety Commission, and the Food and Drug Administration.
The Department-wide Corporate Enforcement Policy provides concrete benefits to incentivize companies to voluntarily disclose discovered misconduct, cooperate with our investigations, and timely and appropriately remediate the wrongdoing.
The Justice Department encourages whistleblowers to alert the government to credible allegations of fraud, including utilizing the qui tam provisions of the False Claims Act or through the Department’s Corporate Whistleblower Program at CorporateWhistleblower@usdoj.gov using the form available here.

Updated July 14, 2026

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The European Central Bank (ECB) has selected 36 payment service providers (PSP) from across the euro area to participate in the digital euro pilot. The pilot exercise is crucial for testing the digital euro’s technical functionality and operational processes, as well as for refining user experience. The pilot aims to support the ongoing preparatory work for the potential issuance of a digital euro, and is due to start during the second half of 2027 for a period of 12 months.
Following a call for expression of interest in March 2026, the Eurosystem received more than 50 applications from PSPs, reflecting strong interest and engagement from the market. Applicants were evaluated based on a set of pre-defined eligibility criteria. The selected participants, including banks and non-bank service providers, span a broad range of business models and sizes and offer broad geographical coverage, ensuring a diverse and representative testing and learning environment for the digital euro.
“The strong market interest in the pilot shows the private sector’s readiness to engage actively and quickly advance with the digital euro project to strengthen the European payments landscape,” said ECB Executive Board member Piero Cipollone, who chairs the High-Level Task Force on a digital euro. “We look forward to deeper engagement as we work with and learn alongside European payment service providers in developing a secure, efficient and inclusive digital euro.”
The pilot will use a beta version of the digital euro. It will be functionally and technically close to the digital euro as foreseen in the draft legislation but will not have legal tender status.
Some of the selected providers – known as distributing PSPs – will give Eurosystem staff access to beta digital euro services, such as setting up their beta digital euro account and paying, and others – known as acquiring PSPs – will serve selected merchants and enable them to receive beta digital euro payments. Some providers will play a dual acquiring and distributing role.
The pilot will take place at the ECB and 19 national central banks across the euro area, namely in Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. The pilot takes into account that selected PSPs may provide pilot services in countries other than the one in which they are established.
The pilot will involve staff from the ECB and participating national central banks, as well as e-commerce merchants, and merchants offering everyday services on their premises (e.g. cafeterias and restaurants). Staff at participating central banks will have the opportunity to make beta digital euro payments from person to person (both online and offline) and from person to business (both at the physical point of sale, including Software Point of Sale, and via e-commerce, including mobile payments).
The pilot will also help refine the digital euro design and user experience. Updates on progress will be regularly published on the ECB’s dedicated digital euro pilot webpage. As next steps, the selected payment service providers will work closely with their respective national central banks and the ECB to make the necessary preparations for the pilot exercise.
 
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As a result of the historic deal related to U.S. and Taiwan Trade and Investment announced in January 2026, TSMC has just announced an incremental $100 billion investment for a total of $265 billion in the U.S. This investment will result in four additional advanced semiconductor manufacturing facilities, bringing the total to 12 leading-edge semiconductor and packaging facilities.
Today, the White House and the Department of Commerce announced an incremental $100 billion investment by TSMC for advanced semiconductor manufacturing and packaging facilities in Arizona. With the additional facilities, TSMC’s $265 billion investment will provide a total of 12 facilities in the United States.
This follows the March 2025 announcement with President Trump and Secretary Lutnick, in which TSMC agreed to expand its original $65 billion investment commitment by an additional $100 billion. The total planned investment in the United States is now a record $265 billion.
The announcement comes just months after the signing of the historic deal on trade and investment between the U.S. and Taiwan, under the auspices of the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States, and highlights the Trump Administration’s commitment to strengthening domestic manufacturing and U.S. technological leadership through strategic partnerships and investment.
This additional $100 billion investment marks a significant expansion of TSMC’s commitment to build multiple fabrication plants and advanced packaging facilities in the United States. TSMC’s investments in the United States are expected to create significant construction and high-tech jobs while driving billions of indirect economic output as TSMC executes its investment plan.
“President Trump’s leadership is driving companies to invest in American manufacturing. TSMC’s announcement of an additional $100 billion investment following our historic deal on trade and investment with Taiwan will create tens of thousands of American jobs and bring advanced semiconductor manufacturing back to America,” said Commerce Secretary Howard Lutnick.
“We appreciate the strong collaboration and support of the Trump Administration, Secretary Lutnick and our leading U.S. customers, and have announced an additional $100 billion investment in the U.S., bringing the total planned investment to $265 billion and adding to the largest foreign direct investment in U.S. history,” said Dr. C.C. Wei, TSMC Chairman and CEO. “This is to support the strong multi-year demand from our leading U.S. customers, and we believe this investment will further foster the development of the U.S. semiconductor ecosystem, strengthen the supply chain, and support significant job creation in the United States. We are very excited about the tremendous opportunities that lie ahead of us.”
Additionally, the trade and investment deal is expected to catalyze incremental Taiwanese investment in the United States. The deal provides $250 billion in direct investments by Taiwanese semiconductor and other enterprises and $250 billion of additional Taiwan investment to bring other critical elements of the semiconductor supply chain to the U.S.
 
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The European Commission today adopted a Communication on the competitiveness of the EU banking sector, setting out measures to strengthen the Single Market for banking. 

President of the European Commission Ursula von der Leyen said: “Getting capital flowing is how we will get Europe growing. Our Savings and Investments Union needs a strong, competitive banking sector at its heart. And today’s Communication takes a clear step in this direction, recalibrating our approach to risk, and enabling growth and innovation while maintaining financial stability.” 

The objective is to build a more integrated, efficient, and competitive banking sector that can strengthen Europe’s economy by financing growth, innovation, and strategic priorities, underpinned by a better-balanced regulatory framework, creating the conditions for banks to take prudent risks while safeguarding the sector’s resilience, delivering better services to households and businesses, all while preserving financial stability and fostering sustainable growth. 

This Communication is a key pillar of the Commission’s Savings and Investments Union (SIU) strategy: having a banking sector with the strength and scale to finance growth and strategic priorities, such as innovation, the clean transition, and defence, while delivering high-quality financial services to households and businesses. 

Following a public consultation and exchanges with Member States, stakeholders, and supervisory authorities, the Commission has identified three main challenges that limit the banking sector’s ability to support the EU economy effectively. 

First, the sector remains too fragmented along national lines. This prevents EU banks from scaling up and competing globally in key market segments and finding efficiencies across borders. Second, the way international banking standards, known as Basel III standards, are transposed into the EU framework does not always reflect the specific features of the EU banking landscape. The framework needs to work better for both large and small banks. Third, some parts of the EU regulatory framework, including the interaction between microprudential, macroprudential and resolution rules, as well as reporting requirements, are too complex and burdensome and should be simplified. Addressing these three challenges is essential to building a banking sector that is not only resilient and competitive, but also able to support the EU economy. 

Boosting competitiveness calls for a cultural shift in banking towards responsible, measured risk-taking. Simplifying the regulatory framework, integrating the Single Market and completing the Banking Union would help EU citizens and businesses access better products and services at more competitive prices.  

Key measures 

The Communication identifies key measures that are built around three objectives. 

First: removing barriers to cross-border banking activity and fostering market integration. Today’s Communication sets out the path towards reducing prudential and non-prudential barriers to cross-border activity so that EU banks can reach the scale required to compete globally. This would include the following measures: 

Allowing cross-border banking groups to use capital and liquidity more efficiently across the EU: this would allow groups to redirect excess funds to where they can be more productive without hampering their capacity to finance local economies, and without prejudice to financial stability across the Single Market and in each Member State. 

Strengthening common safeguards: the Commission will seek to increase trust in the financial system and among supervisors by proposing a simpler and more effective common deposit protection mechanism in the Banking Union. This would replace the 2015 European Deposit Insurance Scheme proposal and build on existing central and national safety nets, which are now fully funded.  

Closer monitoring of EU anti-money laundering and consumer protection frameworks and their national implementation: this would make it easier for banks to offer services across borders.

Second: implementing international standards while taking into account EU specificities and proportionality. The EU remains committed to applying international standards while better reflecting the specificities of the EU banking sector. To preserve the international level playing field and support EU banks to compete globally, the measures set out in the Communication include: 

Re-assessing how the EU implements certain international standards, which may be in some cases limiting the lending capacity of EU banks.

Possible revisions of certain prudential and corporate governance rules to better reflect EU banks’ specificities in relation to banks’ size, business models, and activities.

Finally: the regulatory framework for banks should be simplified as part of the Commission’s wider objective of reducing administrative burden. Trust in the banking system depends on strong safeguards, but unnecessary complexity should be reduced and requirements made more predictable and transparent for banks and authorities alike. In particular, the Communication highlights:

Simplifying the capital stack and further harmonising banks’ macroprudential buffers.

Standardising and streamlining resolution capital requirements and processes.

Adjusting the criteria and thresholds for “small and non-complex institutions” and adapting their requirements.

Next steps

The Commission has sought stakeholder feedback, and respondents are welcome to submit views or comments in the months to come. The Commission will propose in the first quarter of 2027 a package of measures to amend the banking regulatory framework and deliver on this Communication, in line with the objectives of the One Europe, One Market roadmap. In parallel, the Communication calls on Member States, supervisory authorities, and the banking industry to continue their own efforts to improve bank competitiveness.

Background

The SIU strategy aims to improve how the EU financial system channels savings into productive investment. It envisages an efficient and integrated banking sector based on a single rulebook and a completed Banking Union. The strategy is aligned with the EU’s Competitiveness Compass, developed in response to the recommendations of the Letta and Draghi reports; the Single Market Strategy; and the One Europe, One Market roadmap. 

 
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The European Commission officially launched the EU-Ukraine Drone Alliance during the third EU-Ukraine Defense Industry Forum in Kyiv. The Alliance will help the EU and Ukraine work more closely on developing and using drones and systems to stop hostile drones. It is part of wider EU efforts to strengthen Europe’s defense in this fast-changing area.
The Alliance brings together companies, start-ups, researchers, armed forces and other users from EU countries and Ukraine. Its main goal is to help improve the security of both the EU and Ukraine by supporting a strong drone industry, encouraging the development of new drone and counter-drone technologies, and helping build Europe’s overall capacity in this area.
The Alliance begins to implement the Drone Deal, announced by President Ursula von der Leyen in Kyiv on Wednesday 15 July. Its objective is to build joint ventures between Ukrainian and European companies, and to accelerate the development and production of next-generation drones and counter-drone systems. By doing so, it will help ensure that Ukraine has the capabilities it needs today, while strengthening Europe’s defense readiness for the future.
The Commission is now preparing the first meeting of the 18 founding members scheduled to take place in Brussels in September.
These founding members, selected following an open call for expression of interest, include ORQA d.o.o., Indra Group, Fincantieri, WB Electronics/WB Group, Destinus, Delair, RSI Europe, TERMA A/S, Quantum Systems from EU Member States.
Selected Ukrainian members are LLC Skyfall Industries, LLC, Greentech Harvest, LLC, Tencore, LLC, Deviro, LLC, Vyriy Industry, Scientific production Company ‘ATHLON AVIA’ LLC, TEHAVTOFART PIVDEN” (TAF Industries), UFORCE and F-Drones.
Background
The EU-Ukraine Drone Alliance was first announced by President von der Leyen in her State of the European Union speech in 2025 to foster an innovative defence drone-industrial ecosystem. It is a key deliverable of the Joint Communication Preserving Peace – Defence Readiness Roadmap 2030, published in October 2025, and of the Communication on the Action Plan on Drone and Counter Drone Security of February 2026.
The announcement follows the selection of the 18 founding members, including both EU and Ukrainian companies, based on a call for expressions of interest. The application deadline was 25 May 2026.
 
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Blog post | Changes in global trade policies and heightened trade tensions pose a challenge for euro area firms, particularly those operating internationally. For banks, these developments increase credit risk: the firms affected can face volatile demand, supply disruptions and squeezed margins, and may find it harder to service their debts.
This post looks at how euro area banks have responded to rising trade tensions since 2025, drawing on granular analyses of loan portfolios from AnaCredit and survey data from the euro area bank lending survey (BLS). It focuses on trade with the United States, which has been at the centre of recent policy shifts, including the broad-based tariffs imposed in 2025.[1]
Our findings show that banks have responded to these risks by stepping up their monitoring of exposed borrowers. They have also adopted a more cautious stance when lending to firms. These adjustments were more pronounced among the banks most heavily exposed to trade risks, particularly where such risks compounded existing corporate vulnerabilities. For firms, higher trade risks have not only led to tighter lending conditions, they have also dampened loan demand.
Uneven trade risk across euro area banks’ loan portfolios
Euro area banks’ exposure to trade risk depends on both the importance of trade for their corporate borrowers and the share of affected firms or sectors in their loan portfolios. We measure this exposure in two steps. First, we calculate the share of euro area value added consumed in the United States and the share of US value added embedded in euro area firms’ output. Second, we average these shares at bank level, weighting them by each individual bank’s exposure to specific countries and sectors.[2] This allows us to capture the exposure of euro area banks to trade with the United States through their loan portfolios, based on how reliant their corporate borrowers are on exports to and imports from the United States. Chart 1 shows how these exposures are distributed across banks.

Chart 1

Distribution of euro area banks’ exposures to trade with the United States

(y-axis: kernel density across banks, x-axis: trade exposure at bank level, percentage)

Sources: ECB (AnaCredit), European Commission (Figaro) and ECB calculations.
Notes: The chart shows euro area banks’ exposure to trade with the United States, calculated using value added in trade flows between the regions, including indirect links through other countries across value chains. Exports represent the share of euro area value added consumed in the United States, and imports represent the share of US value added embedded in euro area firms’ output. At the bank level, exposure is averaged based on the trade exposure of counterparties’ sectors, weighted by loan volumes. A kernel density chart estimates the distribution of a continuous variable with a smoothed curve; higher values indicate more common observations, and the total area under the curve equals 1. The chart combines 2023 trade data with December 2024 loan data to assess banks’ potential vulnerability to trade shocks in 2025.
Latest observations: December 2024 (AnaCredit) and 2023 (Figaro).

Three key insights emerge:[3]
First, euro area banks are more exposed to US export-related risks than to import-related risks. In Chart 1, the blue area (showing goods and services exported to the United States) is positioned further to the right, indicating higher overall exposure. Meanwhile, the yellow area (representing goods and services imported from the United States) is concentrated further to the left, reflecting lower exposure.
Second, export-related risks from trade with the United States vary from bank to bank, as indicated by the wide blue distribution, with many banks only moderately exposed. By contrast, import-related risks are concentrated in the low-exposure range, suggesting that most banks face limited risks from imports from the United States.
Third, a small number of banks are highly exposed to trade risks stemming from euro area exports to the United States, as shown by the long right tail of the blue distribution.
So how are these exposures affecting lending by euro area banks? In 2025, about half of the banks participating in the euro area BLS reported that trade risks were important, and expected similar levels of exposure in 2026.[4] High tariffs on EU exports to the United States and ongoing trade uncertainty may therefore influence banks’ credit conditions, as explored in the following section.
Trade tensions and tighter credit supply
Rising trade tensions are likely to have led to stricter lending conditions for firms, particularly those reliant on exports to the United States. To quantify this effect, we analyse the relationship between bank lending and banks’ exposure to trade risks in export markets. Since changes in lending can also reflect weaker loan demand, driven by a decline in investment owing to tariffs and uncertainty, we have used granular AnaCredit data to isolate the effect on bank loan supply.[5]
Chart 2 suggests that the banks most exposed to borrowers exporting to the United States have reduced their loan supply the most since April 2025. This decline coincided with heightened trade tensions, particularly the threat of tariffs. The dampening impact on loan supply is estimated to be have been most pronounced between April and October 2025, when US-EU trade disputes were at their peak. It then moderated later that year as trade sentiment improved following the preliminary US-EU trade framework agreement negotiated over the summer and as policy uncertainty eased.[6]
These findings highlight how a volatile trade environment and higher tariffs can influence banks’ risk assessment, leading to tighter credit supply.[7]
Chart 2
Relationship between bank loan supply and exposure to US-exporting borrowers

(impact of a one standard deviation increase in export exposure to the United States on supply-driven three-month loan growth (standard deviation, %))

Sources: ECB (AnaCredit), ECB Supervisory Reporting, Amiti and Weinstein (2018) and ECB calculations.
Notes: The chart shows the estimated effects of bank-level export exposure to the United States on supply-driven three-month loan growth. Loan supply is identified following Amiti and Weinstein (2018). The construction of the bank-level export exposure measure is described in the notes to Chart 1. Regressions include bank and time fixed effects and control for the interaction between bank size and time. Positive (negative) values indicate an expansion (contraction) in loan supply.

Data from the BLS bear this out.[8] Since mid-2025, several banks have reported changes in lending behaviour due to trade risks. While some banks opted to monitor the situation closely without altering credit standards, others tightened them, particularly for firms in sectors highly exposed to trade risks. In some cases (e.g. in the car industry) trade-related tightening compounded pre-existing structural vulnerabilities.
A net 11% of banks reported stricter credit standards in 2025 owing to changes in global trade policies and the associated uncertainty, with similar effects expected in 2026 (Chart 3). These decisions were driven by lower risk tolerance and concerns over credit quality, reflecting heightened prudence despite banks’ solid balance sheets overall. Meanwhile, trade tensions also dampened firms’ loan demand: a net -6% of banks reported a decrease in 2025, while a net -3% expected this decline to continue in 2026.[9]
Chart 3
Impact of changes in trade policies and related uncertainty on credit standards and firms’ demand for loans

(net percentages of banks reporting a tightening/easing impact on credit standards (+/-), a deterioration/improvement in banks’ situation (+/-) and a positive/negative impact on loan demand (+/-))

Sources: ECB (BLS).
Notes: Net percentages for credit standards (loan demand) refer to the difference between the percentage of banks reporting a tightening impact on credit standards (a positive impact on loan demand) and the percentage reporting an easing impact on credit standards (a negative impact on loan demand). For the impact of trade policies on banks’ situation, net percentages refer to the difference between the percentage of banks reporting a deterioration/tightening impact and the percentage of banks reporting an improvement/easing impact. “Credit quality” refers to the non-performing loan (NPL) ratio and other indicators of credit quality. Latest observations: 2025 (past) and 2026 (expected).

Conclusions
Overall, economic policy uncertainty has weakened credit dynamics.[10] Recent trade tensions have exacerbated this impact, not only by reducing loan demand but also by prompting the banks most exposed to firms exporting to the United States to further tighten their lending conditions. While euro area banks continue to maintain robust balance sheets, they have been forced to adjust their strategic planning regularly and adopt more cautious lending practices in order to navigate these trade-related risks.
The views expressed in each blog entry are those of the author(s) and do not necessarily represent the views of the European Central Bank and the Eurosystem.
 
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