Yesterday in Toronto, Commissioner for Trade and Economic Security, Maroš Šefčovič, and Canada’s Minister for International Trade Maninder Sidhu launched negotiations for an EU-Canada Digital Trade Agreement (DTA). Building on nine years of successful implementation of the EU-Canada Comprehensive Economic and Trade Agreement (CETA), this new deal will upgrade EU-Canada trade by making it easier and safer for businesses to trade digitally across borders and providing stronger protections for consumers online.
The launch of DTA negotiations reflects the mutual commitment to secure, open and rules-based trade, and to strengthening and diversifying trade with like-minded partners. Through this agreement, the EU and Canada aim to play a leading role in shaping high-standard international rules for digital trade.
Focus on trust and predictability
The agreement is expected to set clear, predictable rules for businesses and consumers engaged in digital trade, while ensuring that both the EU and Canada retain the right to develop and implement policies addressing new digital economy challenges. More specifically, the DTA will aim to:

Create a safe online environment with binding, high-standard consumer protections for personal data and privacy, and protect against unsolicited commercial messages. This will boost consumer confidence and assurance in digital transactions.
Enhance legal certainty for businesses by promoting paperless trade; ensure the validity of electronic signatures, contracts and invoices; and prohibit customs duties on electronic transmissions for more efficient and predictable digital transactions.
Promote fair digital trade by prohibiting unjustified data localisation requirements and forced transfers of software source code, thereby protecting businesses from protectionist practices and fostering confidence in digital markets.

Background
Discussions at the EU-Canada Summit in June 2025 prepared the ground for the launch of the DTA negotiations, with both partners reaffirming their commitment to reinforcing their economic partnership and diversifying markets. A successful scoping exercise took place in September 2025, with preliminary discussions starting in February 2026.
CETA provides a framework for trade in goods and services, as well as for cross-border investment and public procurement. Since it entered into force nine years ago, trade in goods has jumped 76 percent – to over €81 billion. Trade in services has surged 97 percent – to nearly €51 billion. The DTA will complement CETA by addressing emerging needs in the digital economy.
The DTA will also build on the EU-Canada Digital Partnership, signed in December 2023. While the Digital Partnership sets a non-binding framework for regulatory and research cooperation, the DTA will provide binding commitments that businesses and consumers can rely on.
Digital trade is growing in size and importance, with over 60% of global GDP linked to digital transactions. The EU is the world’s leading exporter and importer of digitally deliverable services. As of 2023, 54 % of the EU’s service trade was conducted digitally, amounting to €670 billion in imports and €661 billion in exports from outside the EU. This includes, for example, telecommunication services, computer and information services, and other services that are typically delivered digitally (financial services, insurance and pension services, etc).
 
 
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Global debt markets remained resilient in 2025 amidst geopolitical tensions, trade disputes and risks for growth prospects, with governments and companies borrowing a record USD 27 trillion, according to a new OECD report.
Sovereign bond issuance in OECD countries is projected to reach a record USD 18 trillion in 2026, up from USD 12 trillion in 2022. Outstanding debt is estimated to have risen from USD 55 trillion in 2024 to USD 61 trillion in 2025. Debt relative to GDP remained stable, at 83% in the OECD countries, but is projected to rise to 85% in 2026.
In emerging markets and developing economies, sovereign borrowing from debt markets hit USD 4 trillion in 2025, bringing the total debt stock to USD 14 trillion, or 30% of GDP, the highest level since 2007.
Corporate borrowing from markets reached its highest level ever in real terms in 2025, with total debt raised across corporate bond and syndicated loan markets hitting USD 13.7 trillion, surpassing the 2021 peak of USD 13.5 trillion. Outstanding debt reached USD 59.5 trillion at year-end 2025, of which USD 36.4 trillion in bonds and USD 23.1 trillion in syndicated loans. Given the scale of capital expenditure required to finance the expansion of AI technology, corporate borrowing needs are expected to increase substantially going forward.
Borrowing costs remain a concern – sovereign real yields are elevated, especially at longer maturities, and higher interest rates are beginning to flow through to the corporate debt stock. Sovereign borrowers have responded by shifting their issuance towards shorter maturities, in an effort to mitigate interest expenditures. The share of issuance in 2025 with a maturity over 10 years reached its lowest point since 2009 for sovereign borrowers, and the lowest on record for corporates.
Corporates, whose borrowing predominantly carries fixed-rate interest structures, have not seen their interest expenditure increase as much as sovereigns, but the shift towards higher interest spending is also clearly visible. Securities with an interest rate above 4% made up half of outstanding investment grade bonds at the end of 2025, while 15% of outstanding non-investment grade bonds cost 8% or more, up from 10% of outstanding bonds in 2021. As near-term refinancing needs disproportionately consist of low-cost debt, this trend is expected to continue.
Central banks remain the largest domestic holders of government debt in many OECD countries, but, as they have reduced their balance sheets, the market is increasingly dependent on price-sensitive investors, such as hedge funds, households and certain institutional investors. This transition in the sovereign debt market – from price-insensitive demand of central banks to price-sensitive demand from other investors – has the potential to increase market volatility and can be expected to reverberate in the corporate market as well.
This year’s report assesses how technology companies are set to become ever-larger issuers in debt markets as they shift their funding model from internally generated cash to external funding to finance the capital-intensive AI expansion, notably data centres. In 2025, nine major players commonly known as “hyperscalers” raised an aggregate of USD 122 billion from bond markets, accounting for nearly half of all technology firm issuance globally.
The report suggests that the AI transformation is set to become a major financing event in global markets for years to come, possibly setting debt markets on a course towards greater concentration, similar to developments in equity markets in recent years. The nine hyperscaler firms alone have projected cumulative capital expenditure of USD 4.1 trillion from 2026 to 2030, about 35% more than total capital expenditure by all US non-financial companies in 2025. If half of these investments were financed by bond markets, these nine firms would represent 15% of global historical average issuance by non-financial issuers annually.
Go here for further information on the report with key findings and charts.
 
 
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Blog | Artificial intelligence is everywhere, and the workplace is no exception. But will it empower workers, or is it set to replace them? This blog post looks at the impact of AI use and investment on firms’ current and future hiring and firing decisions.
Artificial intelligence (AI) has the potential to significantly influence firms’ production processes. It could also profoundly reshape employment and the labour market. But how exactly? On the one hand, AI could replace workers, leading to a decline in employment. On the other hand, it could boost corporate profits and create entirely new types of jobs, complementing the new technology. Meanwhile, reports from the other side of the Atlantic point to thousands of job cuts at companies like Amazon and Target, citing AI as a contributing factor. Have firms already started to replace humans with AI? This blog post examines hiring patterns at European firms, comparing companies that use and invest in AI with companies that don’t. To do so, we draw on the results of the ECB’s survey on the access to finance of enterprises (SAFE) for the second and fourth quarters of 2025.
Widespread use, limited investment
While most firms use AI, few actually invest in it. Two-thirds of the 5,000 firms that took part in the survey reported that their employees use AI, with significant disparities across firm size (Chart 1). Almost 90% of businesses with 250 or more employees use AI, compared with 60% of those with fewer than ten employees. By contrast, a mere quarter of Europe’s companies invest in AI technology. This points to a crucial insight: firms do not necessarily need to invest in AI in order to use AI technology. Thanks to accessible online tools, the entry barrier for using AI is low, enabling broad adoption even among smaller firms.

Chart 1
AI use and investment by firm size

(percentage of firms; by firm size (number of employees))

Source: SAFE.
Notes: Firms that did not respond were excluded. Observations for AI investment: second quarter of 2025. Observations for AI use: fourth quarter of 2025.

Are firms already replacing their workers?
We compare firms that use AI with those that don’t. We factor in a range of variables generally understood to drive employment growth. These include: firm size and age, current change in investment, turnover, profitability, the economic outlook of the firm, expected change in investment, sector and country.[1] Overall, in terms of job creation and destruction, we find no significant difference between businesses that report using AI and those that don’t (Chart 2). However, the picture changes when we separate firms that frequently use AI from those that rarely use it. Companies that make significant use of AI are about 4% more likely to take on additional staff. In other words, AI-intensive firms tend, on average, to hire rather than fire. Much the same can be said of investment in AI: firms that invest in AI are nearly 2% more likely to hire additional staff than those that don’t.
This suggests that investment in AI often entails a higher level of AI use, as well as a need to take on new workers to operationalise and support the technology. The effect is driven by small firms, while AI is neutral for large firms’ employment.[2] Some firms may see investment as a way of scaling up their output. This hypothesis would appear to be borne out when we look at why firms use AI. The overall growth in employment is driven by firms that use AI to promote research and development (R&D) and innovation – key determinants of business growth. Although it is not possible to ascertain the type of workers hired from the survey alone, many are likely to be highly skilled employees able to use and develop AI technology, since firms are looking to use AI for R&D. Conversely, firms using AI to cut their labour costs experience negative effects on hiring and positive effects on layoffs. However, only 15% of firms that use AI cite reducing labour costs as a factor, and this is insufficient to offset the overall positive effects observed to date.

Chart 2
Impact of AI use and investment on current hiring and firing

(percentage marginal probability of an increase in the workforce)

Source: SAFE.
Notes: Chart 2 shows the marginal effect of the b coefficient from an ordered probit of the outcome “increase” in employment (see footnote 1 for more details on the regression). Columns 4 and 5 are the coefficients of dummies taking the value 1 if the firm declared the reason for using AI. Cross-sectional dataset of around 5,300 euro area firms. Observations for current AI investment: second quarter of 2025. Observations for current AI use: fourth quarter of 2025.

Hiring expectations: does AI matter?
So far, we have looked at firms’ current hiring and firing decisions. But what if we ask firms that are currently using or investing in AI about their plans one year from now? In short, we see no marked difference in overall hiring intentions (Chart 3). But when we look specifically at future AI investment, it’s a different story. Firms planning to invest in AI are more likely to have positive expectations for future employment growth, even when their overall investment expectations (in addition to investment in AI) are accounted for. This is true regardless of the level of planned AI investment and suggests that a pause in hiring due to investment in AI technology is also unlikely over the next year. However, these findings could change over a different time horizon. Indeed, a survey from the ifo Institute finds that many German companies expect AI to lead to some job cuts, albeit over a longer horizon of five years.

Chart 3
Impact of AI use and investment on hiring and firing expectations

(percentage marginal probability of an increase in the workforce one year ahead)

Source: SAFE.
Notes: Chart 3 shows the marginal effect of the b coefficient from an ordered probit of the outcome “increase” in employment expectations. The control variables are the same as in Chart 2, with planned AI investment included in addition to AI usage. Expectations refer to the next year. Cross-sectional dataset of around 5,300 euro area firms. Observations for current AI investment: second quarter of 2025. Observations for AI use and future AI investment: fourth quarter of 2025.

Conclusions
As things stand, based on firms’ overall hiring plans, investment in and the intensive use of AI are not yet replacing jobs. In fact, some firms are hiring additional employees – perhaps because they are looking to develop and implement AI technologies while maintaining their existing production processes, or because AI is a way to help them scale up more quickly. Looking one year ahead, the firms that plan to invest in AI are still planning to take on more people than firms that have no such plans. On balance, these findings hold. While some firms may use AI to replace workers, the average firm is more likely to take on additional staff to enable it to use and invest in AI.
So how can we square our findings with some of the gloomier studies? The literature on AI and employment yields mixed results, owing to variations in the time horizons over which the effects are likely to be felt, the geographical areas covered and the research topics explored. Notably, it is difficult to compare studies on Europe (the focus of this blog post) with those on the United States, since the scale of investment in AI, the extent and timing of AI adoption all differ significantly. Our results are in line with the findings of most of the existing studies in the small body of European research focusing on the current and near-term effects.[3]
Overall, the survey data explored in this blog post suggest that the effects of AI on employment are currently still positive. This is certainly the case as AI has not yet significantly transformed production processes. Given that this is set to change, the longer-term impact of AI on employment remains less clear.
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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What is the Industrial Accelerator Act and why is the Commission proposing it?
The Industrial Accelerator Act (IAA) is a legislative proposal designed to strengthen Europe’s industrial base by boosting manufacturing, growing businesses, and creating jobs in the EU. It delivers on the recommendations of the Draghi report on EU competitiveness, the political guidelines of the Commission, and the mission entrusted to the Executive Vice-President for Prosperity and Industrial Strategy.
The IAA mobilises public procurement and public incentives to boost demand for low-carbon and European-made products and net-zero technologies, speeds up investment through faster and simpler permitting, and introduces targeted conditions to ensure major foreign direct investments generate added value for the EU. In so doing, it will create lead markets for clean and strategically important industrial products. In 2024, manufacturing represented 14.3% of EU GDP. The objective is to increase the manufacturing’s share of EU GDP to 20% by 2035 and reinforce Europe’s resilience, competitiveness, and economic security.
The Act complements the Automotive Package adopted on 16 December 2025, defining the ‘Made in EU’ conditions to benefit from the flexibilities under the CO2 standards for cars and vans and the super-credit for small affordable electric cars, as well as the conditions to benefit from financial support for greening corporate fleets.
What are the expected benefits?
The IAA is expected to create substantial value added and high-quality jobs for the EU. Low-carbon demand measures alone could generate more than €600 million of additional value in the steel, aluminium, and cement industries by 2030, and up to €10.5 billion across the automotive value chain. It will also create tens of thousands of jobs, including 85,000 in battery projects and 58,000 in solar manufacturing, while safeguarding existing jobs in steel, aluminium and cement as these sectors transition to cleaner production. The foreign investments conditionalities will also create local employment opportunities, as well as boost overall EU manufacturing capacity.
Digitalised permitting will lead to administrative savings of up to €240 million for all manufacturing industries in the EU.
In total, the Act is expected to save 30.58 million tonnes of carbon dioxide in the energy intensive industries (steel, cement and aluminium), batteries, and vehicle components. Streamlining permitting procedures will accelerate the implementation of decarbonisation projects, therefore leading to an accelerated pace of GHG savings of a sector that represents 22.5% of total EU GHG emissions.
To what sectors does the Industrial Accelerator Act apply?
The IAA covers the manufacturing industry, with a focus on energy intensive industries, the automotive value chain, and net-zero technologies needed to enable the clean industrial transformation and ensure supply-chain resilience. For instance, low-carbon requirements are introduced for the steel used in automotive and construction, while ‘Made in EU’ and low-carbon requirements apply to the cement used in construction and the aluminium used in automotive and construction, when subject to public procurement and other forms of public intervention. For net-zero technologies, the Act introduces ‘Made in EU’ requirements for batteries, battery energy storage systems (BESS), solar PV, heat pumps, wind, electrolysers, and nuclear technologies, when subject to certain public procurement procedures, auctions, and support schemes. It also introduces ‘Made in EU’ provisions for electric vehicles (EVs) and their components.
Why has the Commission chosen these sectors?
The IAA focuses on sectors that are strategically important for the EU economy, and which currently face strong competitive and structural pressures: energy-intensive industries (steel, cement, aluminium, chemicals), net-zero technologies, and automotive components manufacturing. These sectors are essential enablers of the clean transition and vital to downstream industries such as construction, mobility, energy systems, and defence. At the same time, they face declining production in Europe, slower decarbonisation investments and growing global competition and market distortions, such as unfair subsidies, in markets that are increasingly concentrated outside the EU. The value chain of each sector/technology was subject to an in-depth analysis to determine where the EU faced strategic dependencies and structural challenges. Lead markets measures were proposed for steel, cement and aluminium, to start with, and chemicals, at a later stage. These are the most energy and emissions-intensive sectors, as well as sectors for which demand will increase, driven by the green transition needs. Rather than applying a single uniform “European content” threshold across all net-zero technologies, the IAA tailors requirements to the specific structure, maturity, and dependencies of each sector. This approach allows the EU to gradually increase the share of European-made components where it is most impactful and realistic. The targeted design ensures that intervention is proportionate and focused where it can deliver the greatest resilience and economic return.
What does ‘Made in EU’ mean for third countries?
The European Union remains one of the world’s most open markets and is committed to maintaining that openness as a key source of economic strength and resilience. The proposal encourages greater reciprocity by providing equal treatment for public procurement as well as other forms of public intervention to countries that offer EU companies access to their markets through trade agreements. Companies from these countries will therefore benefit from treatment equivalent to Union-origin content. Therefore, ‘Made in EU’ requirements do not restrict market access or consumer choice in an unwarranted manner, but ensure taxpayers’ money benefits European companies and workers. They are designed in a targeted and proportionate manner to create demand in European strategic value chains, giving investor certainty, avoiding critical dependencies, while at the same time ensuring that the EU honours its commitments towards international partners and continues to be open to international trade and investment on fair terms.
What does the Act propose in terms of permitting? What are Industrial Accelerator Areas and what benefits will they bring?
The IAA proposes to fully digitalise permitting processes for industrial manufacturing projects, introduce clear time limits and, for certain projects such as energy-intensive industry decarbonisation or projects located in Industrial Acceleration Areas, allow for faster approval of intermediary steps where authorities do not respond within set deadlines. Dedicated single points of contact and maximum timelines of 18 months for specific projects will speed up energy intensive industries’ decarbonisation investment in the EU.
These measures are designed to provide greater clarity, predictability, and legal certainty for investors. By reducing administrative delays and ensuring transparent, trackable processes, the IAA lowers investment risk and accelerates project deployment.
Member States shall designate Industrial Acceleration Areas to encourage the creation of strategic manufacturing clusters. Projects located in these areas benefit from faster permitting, improved coordination, and better access to infrastructure, financing, and skills ecosystems. The objective is to create competitive industrial hubs that attract investment, facilitate decarbonisation, and strengthen supply chain resilience.
What are the implications for non-EU investors/companies that want to invest in the EU?
The EU remains open to foreign direct investment (FDI). The IAA sets conditions, however, for foreign investments above €100 million by companies originating in countries that hold more than 40% of global production capacities in EVs, batteries, solar, and critical raw materials. Conditions include EU shareholding majority, technology transfer, integration into EU value chains, and job creation.
These measures complement the EU’s existing foreign direct investment (FDI) screening framework. While FDI screening focuses on national security risks, the IAA addresses the economic impact of major investments on the functioning of the Single Market, such as supply security and added value to the Union. By applying common conditions across Member States, the IAA will strike a carefully calibrated balance by ensuring that strategic foreign investments contribute to Europe’s competitiveness, resilience, and industrial transformation, while preventing fragmentation
How does the Industrial Accelerator Act deliver on the Draghi report?
The IAA puts the Draghi report into action by proposing targeted EU-made and low-carbon content requirements to create demand for EU net-zero tech and low-carbon industrial products using public procurement money, public schemes and auction funding. In doing so, it operates as an ‘insurance policy’ to make sure the EU becomes more independent in those strategic economic areas where significant investments are needed.
 
 
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Countries must shift toward fiscal discipline and reforms that raise long-term growth.

Many highly indebted advanced economies face a grim fiscal outlook. Under current policies, the public debt ratios of countries including Belgium, France, the United Kingdom, and the United States are set to deteriorate over the next two decades. They still have room to borrow, but there are limits.
So far, financial markets have been forgiving. But recent tremors suggest that they may become more sensitive to negative news about the fiscal or economic outlook. They may demand higher interest rates even from countries with highly liquid government bond markets, making the job of reducing debt that much harder.
AI-driven productivity growth may slow the increase in debt ratios and reduce the needed adjustment. But the magnitude and timing of this effect are unclear. Population aging and growth declines linked to trade fragmentation and political uncertainty pull in the opposite direction.
What will it take to stabilize debt ratios? In a recent paper with Gonzalo Huertas and Lennard Welslau, we assessed the fiscal adjustment needed in EU countries, the UK, and the US. Using official growth forecasts and market-based projections for interest rates, exchange rates, and inflation, combined with simulated shocks, we generated probability distributions for future debt ratios under different scenarios for the primary balance, which excludes interest payments on the debt.
We considered a 20-year horizon starting in 2024 and divided it into two periods. In the first, a seven-year period, governments raise the primary balance to a level that ensures debt sustainability. In the following, 13-year, period, governments keep the primary balance constant, excluding spending changes driven by an aging society. We aimed to ensure a 70 percent probability that the fiscal adjustment in the first period was large enough to stabilize the debt ratio over the final five years of the 20-year horizon.
Mixed findings
On the positive side, the required long-term primary balance does not look dramatically high in many cases. For example, it is 1.3 percent of GDP for France and the US, 1.8 percent for Belgium and the UK, and 2.5 percent for Italy. On the negative side, however, given large deficits in 2024, substantial adjustments are likely to be needed. About a dozen countries require adjustments of more than 3 percent of GDP; five of those–France, Poland, Romania, the Slovak Republic, and the US–need adjustments of 5 percent relative to 2024.
On paper, almost all EU countries plan adjustments to stabilize the debt ratio. However, several use macroeconomic assumptions that are more optimistic than the EU’s common methodology. Germany’s plan, for example, assumes higher inflation and growth than expert forecasts. If actual growth and inflation turn out lower, Germany’s deficit and debt will end up much higher than it projects.
Moreover, forecasts by the European Commission and the IMF suggest that countries with the biggest adjustment needs are unlikely to deliver the measures needed to stabilize their debt levels. This reinforces doubts about the likelihood of these adjustments.

Historical precedents
While the US and several other advanced economies are unlikely to make fiscal adjustments needed to stabilize debt in the medium term, they may try later. To see how likely this is, we looked at historical precedents: how often countries achieved the required primary balance, the longest period balance was maintained, and how often they made the needed adjustment within seven years.
Our results show that primary balances at the level needed to stabilize debt in several high‑debt advanced economies—and the large adjustments needed to get there from current fiscal positions—are rare. France, for example, would need a primary surplus of 1.3 percent of GDP to stabilize its debt, which has happened only six times in five decades. This does not mean such adjustments are impossible, but history suggests it will be difficult and likely to take longer than the seven years EU fiscal rules envisage.
Policymakers in these economies can take heart from the transformation of what were once considered the euro area’s weakest links. In 2024, Greece posted a primary balance of 4.0 percent, adjusted for swings in the business cycle—well above what is needed to stabilize debt. Portugal needs only a minor adjustment of 0.5 percent of GDP; Ireland’s required adjustment of 1.9 percent is modest, and the country’s debt ratio is exceptionally low, at 39 percent of GDP, far below 122 percent in the US and the UK’s 101 percent.
How did countries that faced severe fiscal crises 15 years ago become examples of discipline today? After the 2008 global financial crisis, financial markets drove them to the edge of collapse, forcing them to accept EU/IMF lending programs. Despite design flaws, these programs’essential fiscal tightening and structural reforms put their economies back on track for sustainable growth. The adjustment was painful and, in the case of Greece, very long-lasting, but it was eventually effective.
The results speak for themselves. With average annual growth between 3.1 percent and 4.2 percent in 2022–25, all three countries exceeded the US pace of 2.6 percent.
The lesson: Fiscal discipline and structural reforms—along with public and private debt restructuring when debt is unsustainable—pay off eventually. Not surprisingly, these reforms and restructurings did not stem from domestic political momentum but were forced on them by market pressure.
Recognize the risks
The question is, How will countries adjust this time? We see several possibilities.
The best outcome would combine growth-enhancing reform—including by implementing the Draghi report’s single-market agenda in the EU—with deep reforms to social security and pension systems. It could also include overhaul of tax systems to raise revenue without discouraging growth. The latter is particularly true for the US—the only Organisation for Economic Co-operation and Development country without a value-added tax.
Unfortunately, this outcome is also politically the most difficult. A more likely path to fiscal consolidation involves a shift in domestic political leadership that prioritize fiscal discipline but not necessarily deep reform. Italy offers an example. Scarred by near disaster in the early 2010s, Italian governments across the political spectrum have kept budgets broadly under control. Italy’s debt ratio of roughly 135 percent of GDP is still high, but its cyclically adjusted primary balance of 0.3 percent of GDP looks far healthier than those of Belgium, France, or the UK.
A hard‑landing scenario could be triggered by a sudden spike in borrowing costs, leading to debt distress. As debt rises, interest rates could also climb, and markets might become more sensitive to news that calls fiscal sustainability into question. Governments might attempt forms of financial repression—for example, encouraging domestic banks or institutions to absorb additional government debt—but such measures have limits. Surprise inflation could temporarily ease fiscal pressures, but persistently higher inflation would eventually drive up nominal interest rates.
Let’s hope that policymakers recognize these risks and act early enough to prevent such an outcome.

 
 
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Blog | Connections to global markets and supplies are a precondition for trade driven development, investments, and jobs. Here, we analyze how the global shipping network has evolved and the impact on countries position in the network over the last two decades.  

Two snapshots of the global liner shipping network: Moving towards more hub-and-spoke connections
The data reviewed here describe scheduled container shipping services between pairs of countries, capturing both the presence of a direct connection and the number of shipping lines operating on each bilateral link. We benefit from a unique dataset, the MDST Container Data Bank1, which comprehensively captures all regular container shipping services, globally, for two full decades. The period has been characterized by a process of consolidation among shipping lines, while also seeing a continued growth of containerized trade.
The analysis compares two snapshots of the network, one from early 2006 and one from early 2026, redrawn using identical methods to permit visual comparison.2 The third chart displays the distribution of the number of direct partners per country in each year
The dataset enables an examination of the number of bilateral connections, and the intensity of those connections, expressed through shipping line counts. It also allows a comparison of how direct connectivity is distributed, and how the network’s structure has shifted.
 
Figure 1. Q1 2006 Liner Shipping Network
(Click on image for full resolution)

Source: Authors, based on data provided by MDST

 
Figure 2. Q1 2026 Liner Shipping Network
(Click on image for full resolution)

Source: Authors, based on data provided by MDST

Network characteristics: What has changed over the last 20 years
The total number of countries included in the global liner shipping network rises from 174 in 2006 to 178 in 2026. Yet the number of direct bilateral connections falls from 2,444 to 2,243. A larger network with fewer direct links results in a lower density: the percentage of country pairs with a direct link decreased from 16.2% to 14.2%.
The  main consequence is that trade between more than four out of five pairs of countries depends on transshipment, and this reliance becomes more pronounced over the two decades, as direct links thin out. For many smaller developing economies and small island states, which already sit at the lower end of the connectivity distribution, this shift heightens their dependence on intermediary hubs for access to global markets.
The average number of direct partners per country falls from 28.1 to 25.2, and the median declines from 22 to 17. These shifts are also visible in the histogram of degree distributions, where the 2026 curve sits to the left of the 2006 curve. More countries have fewer direct partners than they did twenty years earlier.
 
Figure 3. Number of direct connections per country, 2006 and 2026

Source: Authors, based on data provided by MDST

 
The long tail of highly connected countries also shortens. In 2006, the United Kingdom had 117 direct partners, followed by Belgium and the United States. By 2026, the top position is held by Spain with 97, followed closely by the United States, China, and the Netherlands. The underlying cause for these trends is the process of consolidation in liner shipping, including mergers and acquisitions, which, combined with larger vessel sizes, encourages hub-and-spoke operations.
The range between the best and worst connected countries remains high. In both years the least connected countries have only one or two direct partners—these are mostly small island states. For these economies, direct maritime access is limited, and the decline in average connectivity globally is particular concern, as investments and new jobs require access to markets and to supplies.
Competing and connecting: Countries served by the shipping lines
Two different metrics are useful to describe service intensity in the network.
First, at the global level (across all bilateral links), the number of shipping lines per edge captures how intensively each country pair is served. The median remains unchanged at four liner companies, while the global average declines from 9.76 to 8.32 between 2006 and 2026. This combination indicates that the “typical” link is stable, but heavily served routes have lost choice over time, making the overall distribution more uneven.
Second, at the country level, we look at the average number of lines per direct connection for each country. In 2006, a typical country had 6.7 companies per link, with a median of five, but the range was wide: from countries averaging only two operators per route to a few with averages approaching twenty‑four. This reflected large differences in competitive conditions across countries, particularly disadvantaging many small developing economies and small island states. By 2026, this country‑level pattern largely persists, though with lower averages across much of the distribution. Some countries continue to enjoy routes served by many companies, while many others remain reliant on a small number of operators. The persistence of low per‑country averages for less connected economies underscores the continued unevenness of service availability in the global network.
Improving connectivity
A country’s position in the global liner shipping network depends on three key determinants3.

Its domestic cargo base and hinterland: Carriers are more likely to call in a port if there is demand for import and export cargo.
Its geographical position: The closer a country is to the main shipping routes, the less costly it is for the shipping line to deviate and call in an additional port.
Port performance: The time ships and their cargo spend in port is a key consideration for shipping lines to choose a port. Shippers, i.e. the carriers’ clients, have also an interest in short cargo dwell times.

Shipping lines may not only choose to call in a port, but also potentially invest through vertically integrated terminal operators. Once a terminal is operated by a shipping line-associated operator, it is more likely that its sister shipping line or alliance chooses this port – with the collateral that competitors my prefer not to call elsewhere.
The World Bank Group is supporting its clients to improve their position in the global shipping network to ensure that trade-driven development creates the necessary jobs. Performance indicators such as the Container Port Performance Index (CPPI) or the Logistics Performance Indicators (LPI) help identify potential improvements in the time ships and containers spend in port. The Global Supply Chain Stress Index (GSCSI) tracks supply chain stress, including port congestion. And the Port Reform Toolkit (PRT) helps governments and private investors identify options for public-private-partnerships and potential investments in partnership with the World Bank Group.
 

1 The “Containership Databank” provided by MDS Transmodal covers the world’s container carrying fleet of over 6,000 vessels based on known service deployment. Every vessel in service has multiple fields of information including operator, service, route, TEU capacity, service frequency, port rotation and much more. The Containership Databank also includes information about vessels on order and vessels removed from the commissioned fleet. Service deployment of individual vessels in the fleet frequently changes – the Containership Databank tracks these changes and is continually updated. Analyses that are regularly produced to provide advice for clients include: Capacity by operator, route and trade lane; Trends on a consistent quarterly basis since 2006; and Fleet analysis by operator, size, configuration of ships and fuel type.
The Containership Databank is among the sources for global indicators such as the Logistics Performance Indicators (LPI) developed by the World Bank; the Liner Shipping Connectivity Index (LSCI) developed in partnership with UNCTAD; and the Maritime Trade Connectivity Indicator (MTCI) developed in partnership with OECD/ITF.
The data reviewed here describe scheduled container shipping services between pairs of countries, capturing both the presence of a direct connection and the number of shipping lines operating on each bilateral link.
2 The liner shipping network is modelled as a weighted, undirected graph. Nodes represent countries (ISO‑3 codes). An edge exists between two countries if at least one liner shipping company operates a direct bilateral service; edge weight reflects the number of distinct shipping lines serving that pair.
Layout is generated using a force‑directed spring layout (NetworkX spring_layout) with parameters: k = 4.0, iterations = 500, random seed = 42,  node_size = log(degree+1) × 75, weighted_degree = ∑ companies on all adjacent edges. Distances are weighted inversely to edge weights, so country pairs connected by many shipping lines are drawn closer together.
Images generated with Microsoft Copilot Analyst World Bank Group license.
3 Wang and Cullinane 2016; Fugazza and Hoffmann 2017; UNCTAD 2017; Jouili 2019; Ducruet 2020; Hoffmann and Hoffmann 2020; Guerrero et al. 2021; Mishra et al. 2021; Hoffmann and Hoffmann 2021; Wang, Dou, and Haralambides 2022; Hoffmann et al. 2024; Faure and Ducruet 2025; Canbay et al. 2026; Tsantis et al. 2026. 

 
 
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Blog | Tariff hikes are putting European companies under strain at a time when productivity growth is already sluggish. Short-term business sentiment is not the only thing at stake. Tariffs could also dampen business dynamism, a key channel for innovation and long-term growth.

Business dynamism – the constant churn of firms entering the market, growing, contracting and then exiting – is crucial for productivity. Through “creative destruction”, new firms with better technologies and business models take the place of their older, less efficient counterparts. Meanwhile, competition compels incumbent firms to innovate, invest and stay sharp if they want to remain competitive. When this process weakens, productivity slows. This blog post focuses on how the current trade tensions are threatening incumbents in the euro area. Specifically, it looks at their risk of exit and their decisions to scale up or down. It also examines why tariffs matter for productivity and long-term economic growth and what this means for monetary policy.
Do trade tensions pose a risk to the euro area outlook?
Before we delve into the details, let’s take a step back and set the scene.
Last year’s tariff increases are already weighing on the euro area economic outlook.[1] However, beyond the immediate impact on exports lies a deeper concern: if export-oriented firms – which are typically more efficient and innovative – scale back their activity or shut down entirely due to higher tariffs, the economy will lose some of its strongest producers. This will make resource allocation less efficient. It will slow the spread of new technologies. And overall productivity will decline over time.
Uncertainty amplifies these effects. When firms cannot reliably predict conditions of trade, and hence future revenues, they tend to adopt “wait-and-see” strategies. They delay investment. They postpone their expansion plans. And they often shift innovation away from risky frontier research towards safer, more incremental projects. While these strategies may protect firms in the short term, they also slow the pace of technological progress across the economy. A prolonged period of high uncertainty and pressure on profits can therefore weigh on growth for years.
What can the firm-level data tell us?
To understand how firms respond to trade tensions, we need detailed data. Firm-level administrative records – though sometimes delayed and with larger firms over-represented – offer a window into the mechanisms that drive business creation, expansion and exit.
We draw on detailed data for Germany, Spain, France and Italy from 2008 to 2023 to examine how trade tensions affect incumbent businesses based on their exposure to international markets.[2] Exposure is identified by taking sectors whose share of sales to the United States stands above the median within each country. These are industries whose exports to the United States are greater than those of at least half of the other industries in the same country.
Our dataset combines information from Orbis and BACH, covering more than three million firms and around 27 million observations. This robust information allows us to track firm growth and exit patterns. It also enables us to control for firm characteristics, as well as country and sector-specific factors – for instance, the exceptional disruption caused by the COVID-19 pandemic.
To capture swings in global trade tensions, we use a text-based index that counts newspaper mentions of tariffs, trade disputes, retaliation and related topics.[3] Only sharp spikes – significant deviations from historical patterns – are classified as trade shocks. Unsurprisingly, the most notable episode in our sample coincides with the first Trump Administration.
Our results show that trade shocks lowered the chances of firms expanding (Chart 1, panel a) and raised the risk of firms exiting (Chart 1, panel b). These effects were strongest for firms that were heavily exposed to the United States, although the differences between highly export-oriented firms and the rest were moderate, albeit statistically significant.
This matters because the firms that are most exposed to trade with the United States are also, on average, the most productive (Chart 1, panel c): they generate more value added per worker and are often more innovative. When these firms shrink or exit altogether, the economy loses not only jobs, but also some of its most productive capacity and dynamic elements.

Chart 1
Trade shocks and firm performance by exposure to the United States

a) Percentage change in likelihood of job creation

b) Percentage change in likelihood of firm exit

c) Productivity ratio by exposure to trade with the United States

(percentage)

(percentage)

(ratio)

Sources: BvD Electronic Publishing GmbH – a Moody’s Analytics company, Banque de France, European Commission, Durrani (forthcoming) and ECB staff calculations.
Notes: Trade shock residuals with +1 standard deviation from an AR(1) regression for the trade tensions index by Durrani (forthcoming). Low (high) exposure firms in sectors and countries with a share of sales to the United States below (above) the median. Cox proportional hazards estimates controlling for firms’ balance sheets, size, performance, and country and sector effects. Estimates statistically significant at 99%. In panel c, ratio of productivity (value added per employee) between low and high-exposure firms.

Beyond the obvious: supply chains and fragmentation
And yet, the overall impact of trade tensions on productivity may be even larger than might be suggested by firm-level churn alone. Other transmission channels include:

supply chain disruptions and costly reorganisations that prioritise resilience over efficiency;
trade fragmentation, which can reduce the size of export markets and impair economies of scale;
loss of access to key inputs, undermining production efficiency;
reduced technology diffusion, which is particularly harmful for catching-up economies.

All of these channels can slow innovation, erode competitiveness and weaken potential growth.
Why does this matter for monetary policy?
Slower productivity growth can reduce an economy’s potential output and increase inflationary pressures. This is because weaker productivity growth limits how fast an economy can expand without pushing up costs and prices. It also lowers the natural rate of interest consistent with stable inflation. This limits the room for central banks to cut interest rates during downturns. As explained in an earlier ECB Blog, weaker productivity growth can also make an economy more sensitive to financing conditions. Even small rate increases can significantly slow investment and hiring.
In short, rising tariffs and persistent trade tensions affect much more than individual firms. They reshape the macroeconomic landscape in which monetary policy operates – narrowing the room for manoeuvre and making the economy as a whole more vulnerable.
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.

See, for example, European Central Bank (2025), “US trade policies and the activity of US multinational enterprises in the euro area”, Economic Bulletin, Issue 4
Our dataset includes annual values of firm-level characteristics such as age, number of employees and industry, as well as financial variables (e.g. leverage – the ratio of total liabilities to assets), performance indicators (e.g. revenue growth) and the status of the firms (e.g. new entrant or exit). However, firm entry is substantially underreported in the data, which prevents a rigorous analysis of business creation. This limitation is unlikely to materially affect our analysis, as newly established firms tend to be smaller and less export-oriented. In our sample, the share of new firms exposed to US trade is around 2%, while the share of firms with 10+ years is about 60%.
To capture swings in trade tensions, we use a Durrani (forthcoming) text-based indicator constructed from local newspapers in Germany, Spain France and Italy. Each month, articles related to tariffs and trade tensions are identified using a supervised text classification model. The index is computed as the share of identified articles in total articles for a given month.

 
 
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New category of company that falls between SMEs and large enterprises

EP proposes thresholds of 1,000 employees, €200M in turnover or €172M in total assets to define small mid-caps

New laws seek to boost the competitiveness of EU so-called small “mid-cap” (SMC) enterprises as they grown beyond SME status with targeted measures.

On Wednesday, three EP committees voted to endorse proposals introducing the concept of small mid-cap enterprises (SMCs) and extending to them various exemptions that so far have been available to small and medium enterprises (SMEs). The aim is to avoid cliff-edge situations where a company’s obligations drastically increase when they grow beyond the SME threshold.
MEPs want to see SMCs defined as companies with fewer than 1,000 employees; and either up to €200 million in turnover or up to €172 million in total assets (the Commission proposed 750 employees, €150 million in turnover and €129 million in total assets). At the same time, Parliament wants to ensure that support for SMEs is not diluted, that EU support follows a “think small first” principle, and that the thresholds are reviewed every five years.
Lighter record-keeping obligations for data protection purposes
Under the new law, current SME exemptions from record-keeping obligations under the General Data Protection Regulation (GDPR) would be extended to SMCs when processing data that is not considered high-risk for the subject’s rights. The exemption will not apply to processing sensitive data including biometrics and data on ethnic origin, political opinions, religion, health, or criminal convictions.
Better access to capital markets
The new definition of SMCs in the Markets in Financial Instruments Directive (MiFID) would reduce administrative burdens. It would allow these companies (SMCs) to access SME growth markets and benefit from simpler prospectus disclosure rules, in line with the updated Prospectus Regulation. This would make it easier for SCMs to raise money on capital markets.
An SME Growth Market is a special type of multilateral trading facility created to help small and medium-sized enterprises (SMEs) access public funding, with rules that are adapted to smaller companies.
Simplification measures for batteries and F-gases
Under the Batteries Regulation, SMEs are exempt from certain obligations on battery due diligence policies. To reduce the administrative burden, MEPs want the requirement for economic operators to review, update and make publicly available their due diligence policy to be extended to SMCs and apply every five years or more often if a significant change occurs (instead of every three years as in the Commission’s original proposal).
All importers and exporters of products and equipment containing F-gases are required to register in the F-gas Portal under the EU’s F-gases Regulation, making this burden disproportionate in particular for SMEs and SMCs. MEPs want this registration requirement to be limited to imports for which reporting requirements apply (10 tonnes of CO2 equivalent or more of hydrofluorocarbons or 100 tonnes of CO2 equivalent or more of other fluorinated greenhouse gases) and to exports for which an export limitation exists.
Support for critical infrastructure entities
The package also applies to legislation on the resilience of critical entities, where member states need to support SMC critical entities as they implement the obligations, and to trade defence instruments, access to which should be made easier for SMCs alongside SMEs.
You can read statements by the co-rapporteurs here.
Background
Introducing tailored measures to support SMCs was one of the recommendations of the Draghi report on EU competitiveness, and of the Letta report on the future of the single market.
The two acts voted today form part of the fourth Omnibus package on simplification proposed by the European Commission in May 2025.
Next steps
The economics and civil liberties committees adopted changes to MiFID and the resilience of critical entities directive with 98 in favour, 6 against, and 5 abstentions. Inter-institutional negotiations were authorised with 102 in favour, 6 against, and 1 abstention.
The same committees plus the environment committee adopted changes impacting the GDPR and rules on prospectuses, fluorinated gases, batteries and trade defence instruments with 158 in favour, 9 against, and 10 abstentions. Inter-institutional negotiations were authorised with 166 in favour, 9 against, and no abstentions.
Once the mandates have been endorsed by the EP plenary (planned for March), negotiations with the Council can begin.

 
 
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With a view to boosting EU competitiveness, the Council gave today its final green light to a simplification of the sustainability reporting and due diligence requirements for companies. This legislation simplifies the directives on corporate sustainability reporting (CSRD) and corporate sustainability due diligence (CS3D) by reducing the reporting burden and limiting the trickle-down effect of obligations on smaller companies.
The Omnibus I simplification package reduces complexity and unnecessary barriers, cuts red tape, enhances efficiency and introduces more flexibility for companies that remain subject to its scope with the aim to boost EU competitiveness, especially in a constantly changing geopolitical framework.
“Simplification constitutes a top priority for the Cyprus presidency. With today’s decision, we are delivering on our commitment for a European Union which is more competitive.  Through the package adopted, we are reducing unnecessary and disproportionate burdens on our businesses, with simpler, more targeted and more proportionate rules, both for our companies and our citizens. For a more autonomous Union, which also means a more competitive Union.” – Marilena Raouna, Deputy minister for European affairs of the Republic of Cyprus
Corporate sustainability reporting directive
The CSRD’s scope is narrowed by raising its thresholds to companies with more than 1,000 employees and above €450 million net annual turnover. Regarding third-country undertakings, the updated requirements will apply only to companies with a net turnover above €450 million for the parent undertaking within the EU and above €200 million generated turnover for the subsidiary or branch.
The amending directive also provides for a transition exemption for companies that had to start reporting from financial year 2024 (the so-called ‘wave one’ companies) falling out of scope for 2025 and 2026. It also includes an exemption for certain EU and non-EU financial holding companies from consolidated reporting.
Corporate sustainability due diligence directive
The CS3D’s scope is narrowed by raising its thresholds to companies with more than 5,000 employees and above €1.5 billion net turnover, considering that such large companies have the biggest influence on their value chain and are best equipped to make a positive impact and absorb the costs and burdens of due diligence processes.
On the identification and assessment of adverse impacts, companies can focus on the areas of their chains of activities where actual and potential adverse impacts are most likely to occur. To provide companies withflexibility, when a company has identified adverse impacts equally likely or equally severe in several areas, this company is given the ability to prioritise assessing adverse impacts which involve direct business partners. Companies are also supposed to base their efforts on reasonably available information, which will reduce the trickle-down effect of information requests on smaller business partners.
To provide for a significant burden relief, the obligation for companies to adopt a transition plan for climate change mitigation under the CS3D has been removed.
The updated rules also remove the EU harmonised liability regime and the requirement for member states to ensure that the liability rules are of overriding mandatory application in cases where the applicable law is not the national law of the member state.
When it comes to penalties, businesses will be liable at a national level for failure to apply the rules correctly. The new directive provides for a maximum cap of 3% of the company’s net worldwide turnover, with the Commission issuing the necessary guidelines in this regard.
Finally, the amending directive postpones the CS3D’s transposition deadline by member states into national law by another year, to 26 July 2028. Companies will have to comply with the new measures by July 2029.
Next steps
The text of the legislative act will be published in the EU’s official journal in the coming days and will come into force on the twentieth day after this publication.
Member states will have one year after the entry into force of the directive to transpose its provisions into national legislation except for article 4 on the level of harmonisation, with which they must comply by 26 July 2028 at the latest.
Background
In October 2024, the European Council called on all EU institutions, member states and stakeholders, as a matter of priority, to take work forward, notably in response to the challenges identified in the reports by Enrico Letta (‘Much more than a market’) and Mario Draghi (‘The future of European competitiveness’). The Budapest declaration of 8 November 2024 subsequently called for ‘launching a simplification revolution’, by ensuring a clear, simple and smart regulatory framework for businesses and drastically reducing administrative, regulatory and reporting burdens, in particular for SMEs. On 26 February 2025, as a follow-up to EU leaders’ call, the Commission put forward the so-called ‘Omnibus I’ package, aiming to simplify existing legislation in the field of sustainability.
 
 
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PROTECTING THE U.S. ECONOMY AND NATIONAL INTERESTS: Today, President Donald J. Trump signed a Proclamation imposing a temporary import duty to address fundamental international payments problems and continue the Administration’s work to rebalance our trade relationships to benefit American workers, farmers, and manufacturers.

President Trump is invoking his authority under section 122 of the Trade Act of 1974, which empowers the President to address certain fundamental international payment problems through surcharges and other special import restrictions.

By taking this action, the United States can stem the outflow of its dollars to foreign producers and incentivize the return of domestic production. By increasing its domestic production, the United States can correct its balance-of-payments deficit, while also creating good paying jobs, and lowering costs for consumers.

The Proclamation imposes, for a period of 150 days, a 10% ad valorem import duty on articles imported into the United States.

The temporary import duty will take effect February 24 at 12:01 a.m. eastern standard time.

Some goods will not be subject to the temporary import duty because of the needs of the U.S. economy or in order to ensure the duty more effectively addresses the fundamental international payments problems facing the United States, including:

certain critical minerals, metals used in currency and bullion, energy, and energy products;

natural resources and fertilizers that cannot be grown, mined, or otherwise produced in the United States or grown, mined, or otherwise produced in sufficient quantities to meet domestic demand;

certain agricultural products, including beef, tomatoes, and oranges;

pharmaceuticals and pharmaceutical ingredients;

certain electronics;

passenger vehicles, certain light trucks, certain medium and heavy-duty vehicles, buses, and certain parts of passenger vehicles, light trucks, heavy-duty vehicles, and buses;

certain aerospace products; and

informational materials (e.g., books), donations, and accompanied baggage.

In addition, the following goods will not be subject to the temporary import duty:

all articles and parts of articles that currently are or later become subject to section 232 actions;

USMCA compliant goods of Canada and Mexico; and

textiles and apparel articles that enter duty-free as a good of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, or Nicaragua under the Dominican Republic-Central America Free Trade Agreement.

In a separate Executive Order, President Trump also reaffirmed and continued the suspension of duty-free de minimis treatment for low-value shipments, including goods shipped through the international postal system, which will also be subject to the temporary import duty imposed under section 122.
In addition to today’s actions, the President has directed the Office of the United States Trade Representative to use its section 301 authority to investigate certain unreasonable and discriminatory acts, policies, and practices that burden or restrict U.S. commerce.

ADDRESSING FUNDAMENTAL INTERNATIONAL PAYMENT PROBLEMS: The United States faces fundamental international payment problems, in particular a large and serious balance-of-payments deficit.

As a result of its loss of domestic production, the United States must import much of what it consumes, sending U.S. dollars out of our own economy and overseas.
A measurement for the U.S. balance-of-payments is the current account, which tracks the three ways a country can make money: (1) selling goods and services overseas, or the “trade balance of goods and services”; (2) return on investment or labor, or the “balance on primary income”; and (3) voluntary transfers, like remittances, or the “balance on secondary income.”
The United States not only runs an overall current account deficit, but also a deficit in each component of the current account.

The annual U.S. goods trade deficit exploded by over 40% during the Biden Administration, reaching $1.2 trillion in 2024.

In 2024, for the first time in more than 60 years, the United States made less on the capital and labor it deployed abroad than foreigners made on the capital and labor they deployed in the United States.

At present, more money is transferred out of the United States through remittances than money is transferred in.

The situation is getting worse.

In 2024, the United States maintained a current account deficit of -4.0% of gross domestic product (GDP), almost double the current account deficit of approximately -2.0% that prevailed between 2013 and 2019, and larger than 2019 to 2024.

As a share of GDP, the 2024 current account deficit represented the biggest annual current account deficit since 2008.

Compounding these challenges is the decline in the U.S. net international investment position.

At the end of 2024, the U.S. net international investment position was $26 trillion, which was 89% of U.S. GDP. This means that if all of the obligations to foreigners that the United States has incurred were to come due today, and even if all of the foreign assets that the U.S. owns could be instantly deployed as payment, the United States would still end up needing to make payments equal to 89% of its annual economic output in order to meet its obligations. This represents the most negative net international investment position of any country on Earth.

If left unaddressed, these fundamental international payment problems can, among other things, endanger the ability of the United States to finance its spending, erode investor confidence in the economy, distress the financial markets, and endanger U.S. economic and national security.

CONTINUING TO UTILIZE TARIFFS TO PROTECT U.S. INTERESTS: Tariffs will continue to be a critical tool in President Trump’s toolbox for protecting American businesses and workers, reshoring domestic production, lowering costs, and raising wages.

The Supreme Court’s disappointing decision today will not deter the President’s effort to reshape the long-distorted global trading system that has undermined the economic and national security of our country, and contributed to fundamental international payment problems.
Since Day One, President Trump has challenged the assumption that the United States must tolerate the distorted and imbalanced global trading system.
The President’s trade policy brought the world to the negotiating table on our terms.

As a result of the President’s tariffs, major U.S. trading partners covering more than half of global GDP have agreed to historic trade and investment deals to open new markets for U.S. exports, promote manufacturing reshoring, and bring reciprocity and balance to our trade relations.

These deals are creating high-paying American jobs, boosting U.S. manufacturing and technological leadership, and will deliver massive returns for American workers and families for decades to come.

In particular, the United States will continue to honor its legally binding Agreements on Reciprocal Trade. The United States expects the same commitment from its trading partners. While the domestic legal authorities to impose future tariffs will change, the overall direction of travel for the United States—reshoring domestic production and expanding market access abroad through a combination of tariffs and deals—will not.

Today’s action will continue to protect the national interests of the United States by addressing the balance-of-payments deficit to further usher in America’s Golden Age.

 
 
 
 
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