Tariffs and trade disruptions dominated headlines in 2025. European firms rely heavily on global trade – it represents about half of EU output. Despite that, European businesses are not radically overhauling their globalised approach. Instead, they are investing to make their supply chains more efficient and resilient.
US firms are a different story. While they rely less on global trade (it represents roughly one-quarter of output), new tariffs caused them to reduce imports and diversify the countries they import from. In short, US firms are rethinking trade and globalisation.
The latest European Investment Bank Investment Survey, which gathered data from approximately 13 000 firms across the European Union and a sample from the United States, provides insight on how businesses are dealing with new trade realities
 

Tariffs complicate trade

Almost half (48%) of EU firms now see tariffs as an obstacle to trade. But a relatively small share, 18%, sees tariffs as a major obstacle to trade. That contrasts with the United States, where more than three-quarters of firms say tariffs are an obstacle, and as many as 39% cite it as a major barrier.
Compliance with new regulations, standards and certifications bogs down trade on both sides of the Atlantic, but arguably more so in Europe. 20% of EU companies say regulations are a major barrier, compared with 8% in the United States.

Firms rethink suppliers

New tariffs shook up global supply chains. But European firms are taking a long view and finding solutions that balance efficiency with supply chain resilience. While just 7% of EU firms reduced imports, as much as 19% started to diversify the countries from which they import.
This differs significantly from US companies, which are aggressively looking for ways to substitute imports. Almost one-third of US companies surveyed are cutting imports, and roughly 40% are switching countries.

EU firms remain committed to trade

EU firms remain well integrated into international trade (either within the European Union or outside it), with manufacturers and large firms leading the way. Roughly two-thirds of EU firms either import, export or both. That’s a much higher figure than for US firms.

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Compliments of the European Investment Bank – a Platinum Member of the EACCNY

The post EIB | How are EU and US firms Navigating Higher Tariffs? first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Today, the European Commission and the High Representative presented a Joint Communication on strengthening Economic Security. It outlines concrete steps to reinforce the EU’s strength and resilience in the face of growing external economic threats, while retaining our openness and commitment to international trade and investment.
The Joint Communication builds on the Economic Security Strategy of 2023 which set the overarching economic security objectives of promoting industrial strengths, protecting European interests and partnering with like-minded countries.
This Communication sets out the EU’s strengthened approach to addressing risks, using all the tools at its disposal. To strengthen its economic security, the EU will use existing tools irrespective of their original purpose and will deploy its toolbox more proactively when needed. It will also enhance its information collection and analytical capabilities to inform EU decisions and improve coordination with Member States and businesses.
A proactive and targeted approach
The Communication reflects a paradigm shift, moving from a reactive posture towards a more proactive and systematic deployment of tools. The EU will also be more strategic in leveraging its economic weight and the access to its Single Market. The EU’s measures will remain targeted, proportionate and focused on addressing specific high-risk situations. At the same time, the EU, its Member States and businesses will increasingly need to accept the economic costs that come with increased security and resilience.
Drawing on risk assessment work with Member States, the Commission’s immediate focus will be in six priority high-risk areas:

Reducing strategic dependencies for goods and services;
Attracting safe investment into the EU;
Supporting a vibrant European defence and space industry, and other critical industrial sectors;
Securing EU leadership across critical technologies;
Protecting sensitive information and data;
Shielding Europe’s critical infrastructure.

Coordinated and strategic use of tools
The effectiveness of EU action will be strengthened by using existing tools more strategically and in a coordinated way. This includes, for example, new FDI screening guidelines, taking economic security considerations into account in trade defence investigations, and prioritising funding for projects that work on reducing EU dependencies.
Improved situational awareness
The Commission will enhance its assessment of risks, as well as information gathering and sharing with Member States and stakeholders. It will promote a common understanding of economic security risks, and how and when to deploy measures to counter them. This will help the EU to intervene in a timely and effective manner. A key element will be reinforcing the Commission’s close cooperation with business, which is often at the sharp end of economic security issues.
Completing the EU’s economic security toolbox
The EU is also working on new tools to address the current gaps in the EU’s economic security. The first flagship proposal under the new economic security communication, ResourceEU is presented today, focusing on tackling Europe’s overdependence on overseas suppliers of critical raw materials and semiconductors. Other initiatives are at various stages of preparation and implementation, including the SAFE Regulation, Industrial Accelerator Act, Cloud and AI Development Act, CHIPS 2.0 Act, Net Zero Industry Act, Critical Raw Materials Act, Start-up and Scale-up Strategy, and EU Space Programmes.
International cooperation
Europe is far from alone in facing economic security challenges. With that in mind, the EU will even further step up its cooperation with trusted partners, promote common economic security standards, and where possible take joint action to address key challenges.
Next steps
The Commission is already putting in motion any necessary legislative changes, guidelines and other supportive measures to implement the actions set out in the Joint Communication. The Commission will continue to engage intensively with the Member States, third countries and with stakeholders on the new economic security strategic approach.
 
 
 
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The Commission today presented the Automotive Package to support the sector’s efforts in the transition to clean mobility. It sets an ambitious yet pragmatic policy framework to ensure 2050 climate neutrality and strategic independence while providing more flexibility to manufacturers. It also responds to calls by EU industry to simplify rules.
The automotive sector has been key to Europe’s industrial strength for decades, sustaining millions of jobs and driving technological innovation. As the world is changing, the car industry is transforming through new technologies and actors.
Today’s package maintains a strong market signal for zero-emission vehicles (ZEV) while giving the industry more flexibility to achieve CO2 targets, and supports vehicles and batteries made in the European Union. The corporate vehicles initiative will support the uptake of zero- and low-emission vehicles. The automotive omnibus enhances competitiveness by saving costs, expected to be approximately €706 million per year, and cutting red tape, while providing greater investment certainty.
Commission President von der Leyen said: “Innovation. Clean mobility. Competitiveness. This year, these were top priorities in our intense dialogues with automotive sector, civil society organisations and stakeholders. And today, we are addressing them all together. As technology rapidly transforms mobility and geopolitics reshapes global competition, Europe remains at the forefront of the global clean transition.” 
Staying the course towards clean mobility with pragmatism
The Commission presents a package that addresses both supply and demand of the automotive sector’s transition: on the supply side, it presents a review of the existing CO2 emission standards for cars and vans and a targeted amendment to those for heavy-duty vehicles (HDVs). On the demand side, it proposes an initiative to decarbonise corporate vehicles with binding national targets for zero- and low-emission vehicles.
The CO2 standards now provide further flexibilities to support the industry andenhance technological neutrality, while providing predictability to manufacturers and maintaining clear market signal towards electrification.
From 2035 onwards, carmakers will need to comply with a 90% tailpipe emissions reduction target, while the remaining 10% emissions will need to be compensated through the use of low-carbon steel Made in the Union, or from e-fuels and biofuels.
This will allow forplug-in hybrids(PHEV), range extenders, mild hybrids, and internal combustion engine vehicles to still play a role beyond 2035, in addition to full electric (EVs) and hydrogen vehicles.
Prior to 2035, car manufacturers will be able to benefit from “super credits” for small affordable electric cars made in the European Union. This will incentivise the deployment on the market of more small EV models. For the 2030 target for cars and vans, additional flexibility is introduced by allowing “banking & borrowing” for 2030-2032. An additional flexibility is granted for the vans segment, where the electric vehicle uptake has been structurally more difficult, with a reduction of the 2030 CO2 vans target from 50% to 40%.
The Commission is also proposing a targeted amendment to the CO2 emission standards for heavy-duty vehicles with a flexibility easing the compliance with the 2030 targets.
Regarding corporate vehicles, mandatory targets are set at the Member State level to support the zero- and low-emission vehicle uptake by large companies. Having more zero- and low-emission vehicles on the market, both first- and second-hand markets – will benefit all customers. As companies’ cars cover higher yearly mileages, it also means more emission reductions. It will also make zero- or low- emissions and “Made in the EU” a pre-requisite for vehicles benefitting from public financial support. 
Strengthening Europe’s own battery industry
With €1.8 billion, the Battery Booster will accelerate the development of a fully EU-made battery value chain. As part of the Battery Booster, €1.5 billion will support European battery cell producers through interest-free loans. Additional targeted policy measures will support investments, create a European battery value chain and foster innovation and coordination across Member States. These measures will enhance the cost competitiveness of the sector, secure upstream supply chains and support sustainable and resilient production in the EU, contributing to the derisking from dominant global market players. 
Less red tape and stronger enabling conditions for the transition
The Automotive Omnibus will ease administrative burden and cut costs for European manufacturers, boosting their global competitiveness, and freeing up resources for decarbonisation. Businesses are expected to save approximately €706 million per year, bringing the administrative savings thanks to all omnibuses and simplification initiatives the Commission has presented so far to around €14.3 billion per year. Among other things, it proposes to reduce the number of secondary legislation that will be adopted in the upcoming years and to streamline testing for new passenger vans and trucks. This will reduce costs while maintaining highest environmental and safety standards. The roll-out of electric vans in domestic transport is supported by measures that place them on an equal footing with internal combustion vans regarding drivers’ rest times and rules.
The Omnibus also introduces a new vehicle category under the Small Affordable Cars initiative, covering electric vehicles up to 4.2 meters in length. This will enable Member States and local authorities to develop targeted incentives, stimulating demand for small EVs made in the EU.
The Commission is also updating and harmonising car labelling rules, for customers to have complete information about the cars’ emissions when making purchases.
Background
Today’s proposals build on the Automotive Action Plan, and input from industry and key stakeholders gathered during the Strategic Dialogue under President von der Leyen’sleadership since January 2025.
In January 2025, President von der Leyen launched a Strategic Dialogue on the Future of the Automotive Industry, bringing together industry representatives, social partners, Member States, regions and civil society. Three Dialogue meetings have taken place to date, providing a platform to discuss the challenges and opportunities the sector faces.
 
 
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Governing Council endorses recommendations of High-Level Task Force on Simplification, which include:

reducing the number of elements in the risk-weighted and leverage ratio framework
introducing a materially simpler prudential regime for smaller banks, which expands on the existing EU regime
introducing a European governance mechanism that takes a holistic view of the overall level of capital
finalising the savings and investment union – including completion of the banking union – to foster cross-border integration and allow for more efficient capital markets

The European Central Bank (ECB) today published the recommendations of the Governing Council’s High-Level Task Force on Simplification to simplify the European regulatory, supervisory and reporting framework. These recommendations were endorsed by the Governing Council and will now be presented to the European Commission.
These proposals intend to simplify the framework, while maintaining the resilience of the European banking system and ensuring that microprudential, macroprudential and resolution authorities continue to meet their objectives effectively. European harmonisation and financial integration should be fostered. International cooperation is crucial and all jurisdictions should ensure full, timely and faithful implementation of Basel III.
The Governing Council strongly encourages the completion of banking union and the savings and investment union to reduce national fragmentation and allow for more efficient capital markets.
One of the recommendations is to simplify the design of banks’ capital requirements and buffers, also known as capital stacks[1], via two changes. First, merging the existing layers of capital buffers into just two: a non-releasable buffer and a releasable buffer that authorities can lower in bad times.[2] When merging buffers, it will be important to preserve the authorities’ current powers and competencies. Second, reducing the leverage ratio framework from four elements to two, namely a 3% minimum requirement and a single buffer, which could be set to zero for smaller banks.
To improve the quality of banks’ capital, the Governing Council proposes enhancing the capacity of Additional Tier 1 capital to absorb losses when a bank is operating normally, which would be Basel-compliant and maintain resilience. Alternatively, non-equity elements could be removed from the going-concern capital stack provided that Basel compliance and capital neutrality are not compromised.
The Governing Council proposes significantly increasing proportionality under EU banking rules by expanding the existing small banks regime[3] to include more banks and simplifying their applicable rules in a prudent and harmonised manner.
To simplify the macroprudential framework, the Governing Council recommends automatic reciprocation of macroprudential measures. This ensures all banks active in a country that applies a macroprudential measure will be subject to that measure.
For the framework that applies when banks fail, the Governing Council recommends aligning the resolution requirements that apply to all banks more closely with those that apply to the global systemically important banks.[4] This should be done without reducing the components on banks’ balance sheets which can be used to absorb losses and recapitalise in case they fail, thereby keeping the EU in line with international standards and making the rules more transparent and predictable.
To achieve further harmonisation, the Governing Council recommends shifting EU banking rules from directives to directly applicable regulations.
With regard to supervision, the Governing Council recommends completing the Single Rulebook and harmonising rules on licensing, governance and transactions with related parties, which would reduce complexity. Supervisors should be given greater flexibility, for example, in how often they review banks’ internal models.
The Governing Council proposes simplifying the EU-wide stress test by streamlining its methodology and scope and making its results more useful from a banking system and individual bank perspective. The results of this revised stress test exercise would help improve the coordination between macroprudential and microprudential buffers.
The Governing Council proposes being made responsible for taking a holistic view of overall capital in the banking union and cross-country heterogeneities, which is currently missing. This could be done by expanding the role of the Macroprudential Forum, which already brings together the Governing Council and the Supervisory Board, to improve coordination and consistency across countries when setting micro- and macroprudential instruments.
With regard to reporting, the Governing Council proposes that European authorities share their data more widely with each other, allowing banks to report only once, thereby creating a fully integrated reporting system at the European level for statistical, prudential and resolution purposes. This could be done, ideally, via the Joint Bank Reporting Committee. All reporting requirements could be reviewed every three to five years to ensure they are still needed. Banks and supervisors would focus on the important data, disregarding minor reporting errors by implementing a materiality threshold for data resubmission requests. Consolidating supervisory and disclosure data would further reduce reporting efforts, with public disclosure (Pillar 3 reports) derived from supervisory reporting.
The ECB will present the proposals of today’s report to the European Commission, which is preparing a report on the overall situation of the banking system that is due to be presented in 2026.
The ECB has also published today a report entitled “Streamlining supervision, safeguarding resilience”, which discusses its ongoing agenda to increase the effectiveness, efficiency and risk focus of European banking supervision. The initiatives described in this report constitute the ongoing work by ECB Banking Supervision under the existing legislation. They complement the Governing Council’s recommendations and can be fully implemented independently of these recommendations.
The ECB welcomes the ESRB’s report on the simplification of its tasks published today.
 
 
Compliments of the European Central Bank
 
 

Banking regulations set out two main sets of requirements: going-concern requirements for banks to remain solvent when they are operating normally and gone-concern requirements to absorb losses and recapitalise if the bank fails. Both frameworks include risk-based requirements, which set requirements based on risk-weighted assets, and non-risk-based requirements which, in contrast, set requirements based on non-risk weighted assets. This results in several capital stacks, each of which is classified as either going- or gone-concern, and as either risk-based or non-risk-based. Each of these different stacks consists of different elements, i.e. specific buffers and requirements.
The new non-releasable buffer would result from merging the capital conservation buffer with the global systemically important institutions buffer or the other systemically important institutions buffer, whichever is higher. The new releasable buffer would result from merging the countercyclical capital buffer with the systemic risk buffer. The non-binding Pillar 2 guidance would be kept separate, on top of the releasable buffer.
EU banking rules include various proportionality provisions, including for small and non-complex institutions. These are banks that meet various criteria including having less than €5 billion on their total balance sheet and having limited trading activities.
The EU has two gone-concern frameworks: the minimum requirement for own funds and eligible liabilities (MREL) applicable to all banks and the total loss-absorbing capacity (TLAC) applicable to global systemically important banks.
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