The EU amid trade risks and growth opportunities
Headwinds hamper foreign trade while internal market, trade agreements and long-term integration prospects offer new growth opportunities
Executive Summary
27 April 2026
The European economy started out 2026 in a global environment marked by trade policy uncertainty, geopolitical volatility, considerably heightened trade barriers and intensified competitive pressure. While US tariffs, competitive pressure from China and the war in the Middle East are all hampering foreign trade, on the upside, the internal market, new trade agreements and the enlargement of the EU all harbour opportunities for growth in the medium to long term.
High US tariffs are encumbering exports and investments and are expected to curb growth in the euro area by a total of around 0.7 percentage points between 2025 and 2027. In addition, the competitive pressure from China is becoming increasingly intense, especially in export-oriented industries. In the case of Germany, mounting pressure from China is set to shave around one half a percentage point off growth. Geopolitical risks are compounding the situation further in energy and supply chains, driving up prices and additionally weakening short-term growth prospects.
Germany’s exporters nonetheless stand to benefit from two factors in the medium term, namely the deepening of the internal market and new free trade agreements. The deepening of the internal market is still the biggest lever the EU has at its disposal. Moderate improvements such as a slight reduction of remaining barriers would already be sufficient to fully compensate for the drop in growth caused by US tariffs. New trade agreements, such as with India, Australia, Mercosur and other partners, could deliver additional momentum. The partner countries included in this analysis account for around 300 billion euros or twelve percent of EU goods exports outside of the EU, which is more than exports to China and almost level with the volume of exports to the United Kingdom. Around 90 billion of these exports come from Germany. An enlargement of the EU could also open up additional potential for growth in the long term, provided that it is founded on viable governance structures, further reforms and political consensus.
In this context, the EU needs to address the structural overcapacities and market distortions coming from China, secure stable and reliable conditions for its trade with the United States, swiftly conclude and implement key trade agreements, further develop its trade policy agenda with other partners, reduce regulatory fragmentation and remaining barriers on the internal market, and establish reliable framework conditions to facilitate investment.
Introduction
The EU economy started out 2026 in a global environment marked by trade policy uncertainty, geopolitical volatility and intensified competitive pressure. Additional headwinds are the continuing high US tariffs on major industrial products and inputs (including steel and aluminium and other affected product groups). These tariffs increase costs, curb foreign trade and negatively influence corporate investment decisions. In parallel, the pressure on prices and from surplus capacities coming from China is intensifying competition in China, on third markets and increasingly also on the European market, tangibly impacting key industries. The Iran conflict has also illustrated the vulnerability of global trade and energy flows at maritime bottlenecks, underlining the importance of robust supply chains and stable framework conditions.
Despite this challenging environment, the current situation also harbours major opportunities to strengthen the growth prospects and consolidate the resilience of the European economy. The latest developments in the European trade agenda, including the conclusion of negotiations with Australia in March 2026, the political agreement reached with India in January 2026, and the interim EU-Mercosur agreement that will provisionally apply from May 2026, clearly show that the EU is ramping up its foreign trade relations and using new approaches to diversify and tap into other markets. These initiatives are helping to put the European economy on a broader international footing and scale up its economic prospects in key regions.
Alongside foreign trade relations, the European internal market also presents considerable potential for growth and greater efficiency Deeper integration, particularly by lowering remaining regulatory and administrative barriers, can lead to higher productivity, facilitate investment and improve the EU’s ability to absorb external shocks. In the long term, the prospects of EU enlargement could also become more significant and open up additional opportunities under certain conditions. An enlarged and economically more dynamic European area is conceivable if it is based on solid governance structures and further reforms in the candidate countries and political consensus at the EU level.
How are the current external downward factors affecting growth and competitiveness? What opportunities do new trade agreements and a deeper integration of the internal market offer? What priorities should the EU set in its economic policy to strengthen the competitiveness and resilience of the EU in the context of an increasingly challenging global environment?
External downward factors for growth and competitiveness in the EU
The European economy is currently facing a number of external challenges that are increasingly curbing its growth and competitiveness. These include the continuing uncertainty in its trade relations with the United States, with major tariffs and global surcharges remaining in place and unclarity about US trade policy going forward. At the same time, China’s structural overcapacities, marked cost and price differences and competitive conditions fuelled by its industrial policy is tangibly increasing competitive pressure at the international level and burdening key EU industries The latest geopolitical tensions in the Middle East are additionally increasing the external burdens on European companies in the form of increased uncertainty on energy and commodity markets and disruptions to global trade flows
US trade policy and transatlantic uncertainty
US trade policy remains a tangible impediment for European growth. Even though the tariffs based on the IEEPA were suspended by the decision of the US Supreme Court, a global Section 122 surcharge
of ten percent was nonetheless provisionally introduced for a period of 150 days. After this period, the US administration is probably aiming to replace the former IEEPA tariffs with tariffs based on a different legal foundation. In preparation for this step, the US administration has initiated two investigations under Section 301 against numerous trade partners, including the EU. The Section 232 tariffs on steel, aluminium, copper and numerous derivatives were modified in early April but remain high. Furthermore, numerous other tariffs under Section 232 remain in place unchanged.
Overall, the burden on European companies is therefore almost as high as before, so the estimates of the European Central Bank (ECB) remain valid. The tariffs are consequently still set to curb growth in the euro area by a total of around 0.7 percentage points between 2025 and 2027 with the high effective tariffs and ongoing trade political uncertainty continuing to weigh down export prospects and investments
China’s surplus capacities and intensified competitive pressure
China’s economic development is increasingly burdening European industry. The combination of low domestic demand, continuing producer price deflation and an expansion of production capacities fuelled by industrial policy has resulted in large volumes of low-priced industrial goods flooding onto the global market. At the same time, producer prices in Europe have risen tangibly on the back of the Russian war of aggression against Ukraine, strongly increased energy prices and the general inflation shock. These factors are causing a further divergence in the baseline conditions regarding price. Furthermore, the IMF (2026) estimates the real undervaluation of the renminbi at around 16 percent, which additionally increases the cost advantages of Chinese producers.
The consequences for Europe are considerable. In the last 25 years, the euro area has lost around eleven percentage points in global market shares in non-energy goods, with its share dropping from a good 26 percent down to around 15 percent, while China has expanded its share from just under seven percent to over 20 percent in the same period. Key industries including the car industry, chemicals and machinery manufacturing are particularly affected as they are increasingly in direct competition with strongly subsidised Chinese producers and consequently losing market shares both on third markets and within the internal market. This pressure is particularly pronounced in the case of Germany, with the combination of decreasing exports and increasing imports from China already having a tangible downward impact on GDP to the scale of around 0.5 percentage points, according to our estimates. Intensified competitive pressure from China thus continues to be a key external factor that is persistently driving down the growth and industrial competitiveness of the EU.
Geopolitical energy and supply chain risks
The developments surrounding the Iran conflict have once again clearly shown the structural importance of the Gulf region for the global trade in energy and commodities. The strait of Hormuz remains a particularly critical maritime bottleneck, handling a considerable share of global oil, LNG and commodity flows. Disruptions to this corridor do not only affect energy carriers but also key inputs such as sulphur and nitrogen fertilisers, helium and aluminium products which are relevant to numerous stages of industrial and agricultural value chains in Europe.
The main consequences for the European economy are considerably higher energy prices, disruptions to international transport, more expensive commodity and input prices, increased risks of supply bottlenecks, particularly in the case of gas extraction co-products, diesel and kerosene, as well as greater economic uncertainty overall which is also visible on the financial markets. In this context, the ECB has already downwardly revised its growth forecast for 2026 by 0.3 percentage points as these factors
have a tangible dampening impact on purchasing power, production and investments. If these disruptions continue over a longer period of time, particularly in the Strait of Hormuz, the ECB estimates that the downward impact could temporarily increase to around 0.5 percentage points. Growth forecasts for Germany have recently also been considerably downwardly adjusted. On account of the country’s high exposure to the effects of geopolitical tensions on energy and exports, its anticipated economic growth has already been reduced substantially in the baseline scenario with some organisations predicting only half the economic momentum expected previously
Opportunities and growth impetus through trade, internal market and enlargement
Despite the substantial burdens currently weighing down foreign trade, the EU has key political levers with which it can sustainably improve its growth prospects. Particularly new trade agreements, a deeper integration of the internal market and enlargement prospects harbour potential to cushion external risks, increase the resilience of the European economy and tap into new sources of growth. These levers are very different in terms of scale, timeline and economic policy leverage and are presented below.
Growth impetus through trade agreements
New trade agreements are a central mechanism for generating growth-oriented momentum to counteract the current encumbrances on foreign trade. In a global environment that is increasingly marked by trade policy interventions, higher barriers and uncertainty, improved market access and reliable framework conditions can help generate additional demand and strengthen the international integration of the European economy. In this context, the EU has recently visibly ramped up its trade agenda, concluding several agreements and initiating the concrete implementation of others. The following subsections first take stock of the status of this trade agenda before analysing its economic potential.
Status and priorities of the EU’s current trade agenda
The EU’s current trade agenda has notched up concrete progress in several economically relevant agreements. In early 2026, for example, the EU reached political agreement on a free trade agreement with India. In March 2026, it concluded negotiations with Australia and also initiated the temporary application of the interim trade agreement with Mercosur countries starting in May 2026. The EU had already concluded negotiations with Indonesia in 2025 and has also pressed ahead most recently with talks with other ASEAN partners including Malaysia, Thailand and the Philippines.
The following figure provides an overview of those third countries and regions that EU trade policy is currently focusing on and orders them according to importance in terms of EU goods exports. The countries and regions highlighted in light blue have recently concluded or are close to concluding a trade agreement with the EU or have been accorded priority in terms of trade policy or geopolitics. The other partners listed (orange) are countries with which talks are progressing but concern either the modernisation of existing agreements, such as in the case of Mexico and Chile, or are in less advanced stages, such as in the case of the United Arab Emirates. The partner countries set out in the figure (light-blue and orange) together account for around 300 billion euros or almost twelve percent of EU goods exports outside of the EU and therefore represent an economically relevant share of existing EU foreign trade. The following section examines the economic effects of the agreements with countries in the first group in more detail.
Source: Eurostat
Economic potential for growth, diversification and resilience
New trade agreements open up concrete growth opportunities for the European economy. They facilitate access to additional sales and sourcing markets, lower trade costs, increase the security of foreign direct investments in the partner country and improve the conditions for exports, investments and cross-border value creation. The resulting impact on growth stems particularly from the combination of several agreements that affect different regions and thus generate additional demand in various markets.
Model-based analyses show that individual trade agreements each unfold measurable growth impetus. The EU-India agreement is expected to increase GDP in the medium term by between 0.12 and 0.13 percent for both partners (Hinz et al. 2026), while the EU-Mercosur agreement is forecast to lift the GDP of the EU economy by around 0.05 percent (European Commission 2026). Regarding the agreement with Australia, the European Commission has older model-based estimates which predict an increase in real EU GDP of around 3.9 billion euros until 2030 which corresponds to around 0.03 percent (European Commission 2020). The agreements with Indonesia and other ASEAN partners are also expected to have positive effects for the EU but these have only been quantified in part so far (e.g. Centre for Strategic and International Studies 2021). Overall, these agreements will add up to tangible growth momentum for the EU economy even though their impact will be gradual on account of transitional periods and phased liberalisation. Given Germany’s strong focus on exports and greater integration in global value chains, the growth momentum for Germany is expected to be on a similar scale and in some cases higher than the EU average.
In addition to their directly quantifiable impact on growth, trade agreements also have additional structural effects that support growth in the medium and long term. They contribute to diversifying foreign trade, reducing one-sided dependencies and improving access to inputs and commodities. In this context, agreements with partners such as Australia and the Mercosur countries are particularly relevant for building resilient supply chains and securing the supply of strategically relevant commodities. Furthermore, modern trade agreements do not just cover the trade in goods but also include services, investments and elements of regulatory collaboration, the economic impact of which is only partially factored into conventional model-based estimates.
The internal market is a key growth lever
The European internal market is the key endogenous growth lever of the EU. It is one of the central determinants of how well European companies manage to realise economies of scale, make investments and achieve productivity gains. The internal market is particularly important now, given the increasing number and magnitude of external burdens in the form of trade political uncertainty, geopolitical shocks and intensified global competition. A well-functioning internal market not only increases competitiveness but also expands the ability of the European economy to absorb external shocks and generate growth from within.
Economic analyses underline the major importance of the internal market. Model calculations of the European Commission (2019) show that the internal market increases EU GDP by around eight to nine percent in comparison to a scenario with only WTO rules. There is nonetheless still considerable potential that is not used due to a lack of economic integration caused by internal European trade, investment and service barriers (European Commission 2019, ECB 2025b).
Remaining barriers on the internal market
Despite decades of integration, there are still substantial regulatory and administrative barriers on the internal market. The IMF estimates the remaining barriers within the European Union in the trade of goods to be equivalent to a tariff of 44 percent, and up to as much as 110 percent in the service sector, although these figures are only of an indicative nature. The ECB also estimates the barriers as amounting to high tariff equivalents, quantifying fragmentation at around 67 percent for goods and around 95 percent for services (IMF 2024; ECB 2025b).
These barriers are primarily a result of incomplete harmonisation and nonuniform application of EU legislation which leads to a fragmentation of the internal market. Other factors causing fragmentation are divergent national product and authorisation requirements, complicated administrative procedures and limited mutual recognition of qualifications, certifications and security standards. Services, digital business models and knowledge-intensive activities are the most affected, with regulatory differences considerably impeding cross-border expansion and upscaling. The consequences are higher market entry costs and less intense competition, which curbs innovation potential, and a weaker investment environment. This, in turn, greatly restricts competitiveness and expansion capabilities, particularly of smaller and medium-sized enterprises
Overall, the internal market still falls well short of complete integration. The continuing fragmentation constricts productivity gains and weakens the capability of the European economy to compensate for external downward forces from within.
The growth potential of a deeper internal market integration
A more deeply integrated internal market would open up considerable potential for growth and increased prosperity for the European economy. More important in this context than a theoretical scenario of full-scale integration is the question of what the impact would be of realistically achievable reductions in the barriers currently still in place.
The ECB (2025b) has used a comparative approach to quantify this potential. Instead of calculating the effects of a complete elimination of all internal market barriers, it analyses what the effects would be of a phased reduction of existing barriers across the EU that creates a more closely aligned market with lower barriers. The empirical reference used here are member states that have comparatively low regulatory and administrative fragmentation. The analysis shows that approximating this benchmark level would entail a reduction of current internal market barriers of around eight to nine percentage points
The overall economic impact of reducing barriers to this extent can then be quantified. Scaling down the remaining barriers in the trade of goods to this lower benchmark level would produce gains in real income of around 1.3 percent. Reducing existing barriers in the service sector to a similar extent would produce real income gains of around 1.8 percent, resulting from lower trade and market access costs, higher competition and increased efficiency through the improved use of a cross-border division of labour and economies of scale on the internal market (ECB 2025b). Germany would stand to benefit from these effects particularly as an above-average proportion of its domestic value added is generated through integrated cross-border industry, supplier and service structures across the EU internal market.
The ECB analysis also shows that comparatively small degrees of progress in reducing existing barriers on the internal market already hold the potential to unfold considerable macroeconomic effects.
According to ECB calculations, lowering remaining barriers by only around two percentage points would suffice to completely compensate for the downward impact on growth of the current US tariffs. This comparison clearly illustrates that the internal market not only plays a major role in the EU’s longterm growth potential but also in containing the downward macroeconomic effects of external trade shocks.
These figures clearly demonstrate the considerable growth potential of the internal market that has not yet been fully tapped. With a targeted reduction of remaining internal barriers, the EU could increase its economic output from within and fortify its resilience to external trade shocks. This concords with the conclusions of the Mario Draghi report on the future of European competitiveness. In his report, he identifies deepening the internal market and the resolute implementation of structural reforms as a central precondition for higher productivity, economies of scale and investment. At the same time, the Draghi Report emphasises the importance of having a coherent strategy in economic and trade policy to address state-subsidised competition, particularly from China, and safeguard a level playing field on the internal market.
Enlargement as an economic opportunity
An enlargement of the European Union also theoretically harbours potential opportunities for growth. The economic effects would only materialise in the very long term, if at all, and only provided that the candidate countries establish solid governance structures and implement substantial structural reform and political consensus has been reached within the EU about the further course of integration.
In its latest communication on enlargement, the European Commission highlights the importance of preparing for a larger Union and also emphasises that the accession process will continue to be strict, fair and merit-based and proceed along clearly defined steps (European Commission, 2025).
From an economic perspective, enlargement is relevant primarily because an accession to the EU takes the relationship beyond current trade and association agreements and represents a qualitatively higher level of integration. The complete adoption of the EU acquis and the legally binding integration of the new member states into the internal market can, with appropriate framework conditions, foster additional impetus for investment, value creation and more efficient cross-border value chains in the EU in the long term.
The following sections first present the current momentum in the enlargement process overall and in individual key candidate countries and then analyse the economic perspectives of an enlarged European Union
Current momentum in EU enlargement and relevant candidate countries
At the start of 2026, the enlargement process of the European Union has nine official candidate countries: Albania, Bosnia and Herzegovina, Georgia, Moldova, Montenegro, North Macedonia, Serbia, Turkey and Ukraine. Kosovo continues to have the status of a potential candidate country. The candidate countries are in different stages of the accession process, which is structured into individual, separate procedures for each case.
In the last few years, EU enlargement has moved back up the political agenda. Since 2022, several accession processes have made official progress, and further procedural steps have been initiated. At the same time, the momentum of the accession procedures of the individual candidate countries has diverged increasingly. While some procedures have gained visibility and recorded institutional progress
recently, others are struggling with political parameters, unresolved issues regarding reforms or deadlocked decision processes at the EU level (some West Balkan countries and relations with Turkey)
The enlargement process continues to follow a phased and merit-based approach. The procedures do not advance along a uniform timeline but are based on the individual developments in the candidate countries and the decisions of the EU member states. The prospects of enlargement are therefore currently highly uncertain. Enlargement is therefore primarily significant as a long-term process of integration for the EU. At the same time, the discussion on enlargement also recognises the fact that its success does not only depend upon progress being made in the candidate countries but also requires the EU itself to have sufficient institutional and political heft. Issues such as governance structures, decision-making mechanisms and possible institutional adjustments within the EU are therefore also decisive for the long-term success of the enlargement process
Growth opportunities of a larger European economic area
An accession to the EU could unfold economic effects for the new member states and for the existing European Union. For accession countries, a complete integration into the internal market provides them with a reliable regulatory and legal framework, improved access to capital and markets and more attractive investment conditions The EU stands to benefit particularly from an expansion of the internal market, deeper economic ties, productivity gains and more efficient cross-border value chains. These effects will generally not be visible in the short term but rather foster a broad economic impact over time.
Against this backdrop, the current economic size of the candidate and potential candidate countries can be assessed Together, their GDP corresponded to around 9.4 percent of EU GDP in 2025. Within this group, Turkey is by far the largest economy, at around 7.2 percent of EU GDP. The second largest is Ukraine at around one percent and Serbia at around 0.5 percent. The remaining candidate countries all have substantially smaller economies.
Gross domestic product of the ten EU candidate and potential candidate countries compared to the gross domestic product of the EU (share in EU GDP, 2025)
in Milliarden Euro
Source: IWF
Beyond their economic output, the candidate and potential candidate countries are already relevant to the EU from a trade policy perspective. In 2025, around 8.5 percent of EU goods exports outside of the EU went to this group of countries. Here too, a sizeable proportion of these exports went to a few individual countries, with Turkey, Ukraine and Serbia receiving 4.3 percent, 1.8 percent and 1.0 percent respectively of EU goods exports outside of the EU As clearly shown by these figures, economic integration is well advanced in some cases even before an official accession to the EU.
The potential economic impact of further deepening integration can be estimated on the basis of earlier enlargement rounds. Empirical research on the EU enlargement in 2004 mainly identifies strong convergence and growth effects. According to calculations by the IMF (2025), the income gains of all member states at the time were closely related to this round of enlargement. The gains were particularly pronounced among countries that already had strong ties to the new member states and that were less affected by the European debt crisis. These include Germany, Austria and several Scandinavian countries. At the same time, the long-term trends in GDP also show that some countries not in direct geographical proximity to the new member states, such as Portugal, also recorded positive effects in sectors including tourism. Overall, the old member states were able to increase their per capita income by an average of around ten percent, while the new members experienced considerably higher rates of growth over a period of several years.
Transferring these experiences to the current candidate countries, the impact on growth can be expected to be rather limited for the EU in the short term. This is above all due to the comparatively small economic size of the West Balkans and countries such as Ukraine and Moldova compared to the EU. Deeper market integration could nonetheless open up opportunities in the long term above and beyond direct increases in demand. These include, especially, raising competitiveness, expanding economic ties in strategic areas such as green technologies, industry, energy and logistics, making supply chains more resilient and improving overall economic connectivity within Europe.
From an economic perspective then, EU enlargement is less a driver of short-term growth than a longterm structural project to increase integration and resilience.
Conclusions and economic policy priorities
Conclusion
As presented in this paper, while the European economy faces substantial burdens in foreign trade, it also has central levers at its disposal to counteract these negative developments and improve its growth prospects. Our analysis compares the scale of these burdens to the opportunities available to strengthen growth, deliberately focusing on foreign trade factors and levers related to trade policy and the internal market. The structural challenges arising from the gap in competitiveness and investment, set out in the Draghi and Letta reports, are not addressed in depth here.
On the downside, several external factors are currently curbing growth. The continuing US tariffs are anticipated to cut growth in the euro area by a total of around 0.7 percentage points between 2025 and 2027. The competitive pressure from China fuelled by lower prices and surplus capacities are weighing down export-oriented industries, in particular. We estimate the ensuing cut in growth for Germany to be around 0.5 percentage points. Geopolitical factors are additionally hampering economic momentum and have prompted a further downward revision of growth prospects going forward.
However, on the upside, there are also clear opportunities for the European economy to counteract these downward developments and improve its growth prospects. The European internal market plays a central role in these opportunities. Analyses show that the internal market has already increased EU GDP by between eight and nine percent but is still below its potential on account of substantial barriers remaining within the EU market. Moderate improvements here, such as lowering barriers by a few percentage points, would already be enough to fully compensate for the downward impact on growth of the US tariffs. If member states that are lagging behind in terms of fragmentation catch up with leading member states, this would enable real income gains of between one and two percent. Deepening the internal market is therefore the biggest lever available to strengthen the productivity, efficiency and resilience of the European economy.
Another lever with the potential to trigger further growth are the current and planned trade agreements. The direct impact calculated by models, of around 0.12 to 0.13 percent in the case of the EU-India agreement and 0.05 percent in the Mercosur agreement, is not enough to fully compensate for the external burdens but these trade agreements nonetheless improve market access, produce a greater diversification of foreign trade and increase the robustness of the European economy. The relevance of these agreements to growth is underlined by the fact that the partner countries analysed in this statement account for around 300 billion euros or just under twelve percent of goods exports of the EU which is more than the volume of EU exports to China and almost as high as exports to the United Kingdom. Germany’s share in these exports are around 90 billion euros.
The final factor which harbours additional growth prospects is the enlargement of the EU. Enlargement can expand the European economic area, deepen value creation and strengthen the strategic position of the EU, which is becoming all the more important in the face of the current trend towards geopolitical fragmentation.
In its efforts to contain the external burdens and open up new sources of growth, the EU’s resolute deployment of the levers presented in this paper, particularly the further deepening of the internal market and the expansion of its trade policy relations, will be of critical importance. The EU thus needs to set clear priorities in its economic policy as presented in the following recommendations.
Economic policy recommendations
As things stand, the EU should prioritise economic policy measures which are both effective in containing the external burdens and that use the key foreign trade and internal market levers to build competitiveness, growth and economic resilience. A course in economic policy is needed that strengthens planning and investment reliability, reduces regulatory complexity and combines international openness with a resilient industrial basis and also factors in the rising international economic challenges. The following points outline the key areas where action is needed
▪ Regarding the continuing competitive pressure coming from China, the relevant economic challenges must be addressed head on. These include structural overcapacities, massive subsidies, a distorting exchange rate policy and export controls on critical commodities in the form of opaque authorisation and licencing procedures, which greatly affect European companies. The objective here is to create a level playing field that evens out current market distortions without jeopardising economic cooperation in general. A resolute derisking approach which reduces strategic dependencies by tapping into alternative sourcing options and maintaining or expanding value creation in critical sectors in Europe continues to be of central importance in this context. Europe’s policy on China should be developed jointly by the member states,
coherently and based on economic criteria, focusing on cooperation in areas where there are shared interests and robust safeguards in areas which pose rising economic and national security risks.
▪ In its relations with the United States, the EU should work towards creating stable and reliable framework conditions to reduce the continuing uncertainty regarding US tariffs. The latest decision of the European Parliament on the implementation proposals of the EU-US tariff agreement represents an important step towards stabilising the EU’s transatlantic trade relations The trialogue negotiations should now be concluded swiftly. The consequences of the latest decision of the US Supreme Court for the EU-US tariff agreement and the future structure of the tariffs should be clarified swiftly in order to provide companies with a reliable basis for planning and decision-making A viable long-term solution is particularly important for both sides in the area of steel and aluminium.
▪ The EU should swiftly and resolutely conclude and implement its current trade agreements in order to unfold additional prospects for growth and to make European more resilient in terms of foreign trade. The political agreement with Australia shows that substantial progress is possible and opens up important prospects for market access, value creation and access to strategic commodities. The conclusion of the agreement with India also harbours new diversification and export prospects for European companies The EU should ambitiously pursue ongoing talks with other partners to access additional markets, reduce dependencies and strengthen the stability of European foreign trade.
▪ The EU should also make better use of key levers related to the internal market to strengthen its competitiveness and lift investments. The priority here is to reduce regulatory fragmentation and ensure a more uniform and reliable application of EU legislation so that companies operate under comparable conditions across the EU. Divergencies in national requirements, for example in corporate law, administrative processes and product-related requirements, impede cross-border operations and should be tangibly reduced by clearer rules and greater mutual recognition. Furthermore, framework conditions need to be established for the internal market that facilitate investment in research, new technologies and digital solutions. Only with a smooth functioning and less fragmented internal market will companies be able to roll out innovations throughout the EU and realise economies of scale. Initiatives such as EU inc. can inject important impetus here if they are structured coherently and actually manage to facilitate the cross-border operations of companies in practice.
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Imprint
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Author
Frederik Lange
Bereich Volkswirtschaft
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Editorial and Graphics
Dr. Klaus Günter Deutsch
Bereich Volkswirtschaft
T: +49 30 2028 1591 k.deutsch@bdi.eu
Marta Gancarek
Bereich Volkswirtschaft
T: +49 30 2028 1588 m.gancarek@bdi.eu
BDI Publication Number: D 2265