A newly released survey by the American Chamber of Commerce to the European Union (AmCham EU) reveals that 46 percent of U.S.-controlled companies operating in Europe believe that economic relations between the transatlantic partners will worsen in the coming period. This finding, drawn from responses in September, marks an improvement from January, when 89 percent of similar respondents held that pessimistic view. Still, the large minority expecting a decline signals deep unease about future trade, regulation, and policy dynamics.
The survey canvassed 52 U.S.-based firms with European operations between September 8 and 16. It asked respondents to assess likely shifts in trade, investment, and regulatory alignment between the United States and the European Union. While 46 percent anticipate a deterioration in ties, about one-third expect stability, and a smaller share believe relations may improve.
AmCham EU leadership has attributed this moderated outlook in part to a trade agreement concluded in July between the U.S. and EU, which removed most EU tariffs on American goods and imposed 15 percent tariffs on many imports from Europe. Many firms view this accord as having helped forestall more severe damage to transatlantic commerce, even as concerns persist over policy drift and regulatory misalignment.
However, the survey also underscores widespread anxiety about government actions: **60 percent** of respondents expect negative effects from U.S. policy, and **56 percent** fear harmful impacts from EU policy. In other words, while fewer firms now see a wholesale deterioration in ties, the bulk still regard both sides’ policies as potential impediments.
Drivers of Decline Expectations
Why do nearly half of U.S. firms in Europe expect worsening economic relations? The survey and qualitative feedback point to several recurring themes: tariff uncertainty, non-tariff barriers, regulatory fragmentation, geopolitical risk, and shifting supply chains.
First, trade policy remains front and center. Many respondents cited the risk that tariffs—even after the July accord—could still be reintroduced or expanded, sowing volatility. Because import duties influence pricing and sourcing structures directly, firms find the uncertainty deeply destabilizing.
Second, non-tariff barriers—such as diverging regulatory standards, environmental rules, digital compliance regimes, and requirements on deforestation, supply chain due diligence, and sustainability—feature prominently. Companies lament that even when tariffs are addressed, hurdles like uneven enforcement, local content mandates, or data localization rules often complicate market access more severely than raw duties.
Third, regulatory alignment and mutual recognition appear to be fraying. Firms argue that divergence in technical standards, certification regimes, and conformity assessments between U.S. and EU regulators are creating fragmentation. Without consistent equivalence, cross-border operations grow more expensive, risky, and slow.
Fourth, geopolitical uncertainty—in part tied to U.S. political shifts and EU internal tensions—looms large. Several firms pointed to risks from sudden policy changes, sanctions, or tariffs tied to national security claims. That unpredictability discourages long-range investment planning and saps confidence.
Finally, some respondents noted evolving supply-chain strategies. As firms re-evaluate dependencies, exposure to energy price risk, transport delays, and localized sourcing pressures, many intend to diversify away from transatlantic corridors. Restructuring toward nearer suppliers, regional hubs, or alternate geographies may gradually erode the centrality of U.S.–Europe integration in some industries.
Sectoral and Regional Variation in Sentiment
The survey results hint at variation in outlooks across industries, size categories, and geography. Firms heavily reliant on trade in goods—manufacturers, industrial exporters, and components suppliers—tended to express more pronounced pessimism than those in services or digital sectors, where contractual flexibility can absorb friction.
Also, firms with complex supply chains or deep European footprint—especially those active across multiple EU jurisdictions—flagged greater exposure to regulatory inconsistency and fragmentation risk. By contrast, companies concentrated in a few countries with stable regimes exhibited slightly less pessimism.
On a regional basis, companies based in or operating intensively in Central and Eastern Europe or sectors under energy transition pressure highlighted concerns over energy costs, supply security, and regulatory drift. In Western Europe, concerns over taxation, digital regulation, and green transition burdens frequently arose.
Some U.S. firms in Europe also contrasted current sentiment with their expectations earlier this year or during prior administrations. In January, when nearly 9 in 10 anticipated a decline, firms judged the outlook far more dire. Today’s 46 percent estimate suggests a partial easing of alarm—but still signals recognition of serious headwinds ahead.
Implications and Strategic Responses
For U.S. firms embedded in Europe, a creeping decline in transatlantic ties is not mere rhetoric—it carries real consequences. Reduced policy alignment and increased friction can raise costs, shrink margins, deter investment, and slow innovation flows. As America and Europe compete globally, the potential erosion of their commercial partnership could be strategically damaging.
In response, many companies are pushing intensively for renewed cooperation mechanisms. The survey shows that tariff reduction remains a top priority, but so too is strengthening regulatory cooperation, mutual recognition of standards, trade facilitation, and harmonization of environmental and digital regulation. In short, firms are seeking a re-binding of the “rules of the road.”
Several firms also report that they are revising internal scenarios to incorporate more adverse risk assumptions. That includes shifting capital allocation toward more stable regions, hedging currency and logistics costs, diversifying supply chains, and accelerating digital adoption to manage compliance burdens. Some are also lobbying both U.S. and European policymakers to make predictable, transparent trade and regulatory regimes a priority.
From a macro angle, the broader U.S.–Europe economic relationship remains enormous. The transatlantic economy—encompassing trade in goods and services, affiliate sales, foreign direct investment, and cross-border flows—is valued at trillions of dollars. The U.S. and EU are among each other’s top partners in services, investment, and innovation. Disruptions or back-pedaling in policy alignment risk undermining the deep structural foundations of this relationship.
Politically, the findings from the survey will likely resonate in capitals on both sides of the Atlantic. Proponents of deeper U.S.–EU cooperation may lean on results like this to argue for more stable, rules-based engagement. Conversely, those favoring more nationalist or hedged policies may point to the skepticism even from corporate actors as justification for a cautious stance.
In sum, nearly half of the U.S. companies operating in Europe are sounding an alarm: they expect declining economic ties. Their expectations are rooted not just in deterioration of trust or geopolitics, but in concrete tensions around tariffs, regulations, supply chains, and enforcement. How both governments and businesses respond to these signals may well shape the trajectory of transatlantic integration in the years ahead.
(Source:www.usnews.com)
The survey canvassed 52 U.S.-based firms with European operations between September 8 and 16. It asked respondents to assess likely shifts in trade, investment, and regulatory alignment between the United States and the European Union. While 46 percent anticipate a deterioration in ties, about one-third expect stability, and a smaller share believe relations may improve.
AmCham EU leadership has attributed this moderated outlook in part to a trade agreement concluded in July between the U.S. and EU, which removed most EU tariffs on American goods and imposed 15 percent tariffs on many imports from Europe. Many firms view this accord as having helped forestall more severe damage to transatlantic commerce, even as concerns persist over policy drift and regulatory misalignment.
However, the survey also underscores widespread anxiety about government actions: **60 percent** of respondents expect negative effects from U.S. policy, and **56 percent** fear harmful impacts from EU policy. In other words, while fewer firms now see a wholesale deterioration in ties, the bulk still regard both sides’ policies as potential impediments.
Drivers of Decline Expectations
Why do nearly half of U.S. firms in Europe expect worsening economic relations? The survey and qualitative feedback point to several recurring themes: tariff uncertainty, non-tariff barriers, regulatory fragmentation, geopolitical risk, and shifting supply chains.
First, trade policy remains front and center. Many respondents cited the risk that tariffs—even after the July accord—could still be reintroduced or expanded, sowing volatility. Because import duties influence pricing and sourcing structures directly, firms find the uncertainty deeply destabilizing.
Second, non-tariff barriers—such as diverging regulatory standards, environmental rules, digital compliance regimes, and requirements on deforestation, supply chain due diligence, and sustainability—feature prominently. Companies lament that even when tariffs are addressed, hurdles like uneven enforcement, local content mandates, or data localization rules often complicate market access more severely than raw duties.
Third, regulatory alignment and mutual recognition appear to be fraying. Firms argue that divergence in technical standards, certification regimes, and conformity assessments between U.S. and EU regulators are creating fragmentation. Without consistent equivalence, cross-border operations grow more expensive, risky, and slow.
Fourth, geopolitical uncertainty—in part tied to U.S. political shifts and EU internal tensions—looms large. Several firms pointed to risks from sudden policy changes, sanctions, or tariffs tied to national security claims. That unpredictability discourages long-range investment planning and saps confidence.
Finally, some respondents noted evolving supply-chain strategies. As firms re-evaluate dependencies, exposure to energy price risk, transport delays, and localized sourcing pressures, many intend to diversify away from transatlantic corridors. Restructuring toward nearer suppliers, regional hubs, or alternate geographies may gradually erode the centrality of U.S.–Europe integration in some industries.
Sectoral and Regional Variation in Sentiment
The survey results hint at variation in outlooks across industries, size categories, and geography. Firms heavily reliant on trade in goods—manufacturers, industrial exporters, and components suppliers—tended to express more pronounced pessimism than those in services or digital sectors, where contractual flexibility can absorb friction.
Also, firms with complex supply chains or deep European footprint—especially those active across multiple EU jurisdictions—flagged greater exposure to regulatory inconsistency and fragmentation risk. By contrast, companies concentrated in a few countries with stable regimes exhibited slightly less pessimism.
On a regional basis, companies based in or operating intensively in Central and Eastern Europe or sectors under energy transition pressure highlighted concerns over energy costs, supply security, and regulatory drift. In Western Europe, concerns over taxation, digital regulation, and green transition burdens frequently arose.
Some U.S. firms in Europe also contrasted current sentiment with their expectations earlier this year or during prior administrations. In January, when nearly 9 in 10 anticipated a decline, firms judged the outlook far more dire. Today’s 46 percent estimate suggests a partial easing of alarm—but still signals recognition of serious headwinds ahead.
Implications and Strategic Responses
For U.S. firms embedded in Europe, a creeping decline in transatlantic ties is not mere rhetoric—it carries real consequences. Reduced policy alignment and increased friction can raise costs, shrink margins, deter investment, and slow innovation flows. As America and Europe compete globally, the potential erosion of their commercial partnership could be strategically damaging.
In response, many companies are pushing intensively for renewed cooperation mechanisms. The survey shows that tariff reduction remains a top priority, but so too is strengthening regulatory cooperation, mutual recognition of standards, trade facilitation, and harmonization of environmental and digital regulation. In short, firms are seeking a re-binding of the “rules of the road.”
Several firms also report that they are revising internal scenarios to incorporate more adverse risk assumptions. That includes shifting capital allocation toward more stable regions, hedging currency and logistics costs, diversifying supply chains, and accelerating digital adoption to manage compliance burdens. Some are also lobbying both U.S. and European policymakers to make predictable, transparent trade and regulatory regimes a priority.
From a macro angle, the broader U.S.–Europe economic relationship remains enormous. The transatlantic economy—encompassing trade in goods and services, affiliate sales, foreign direct investment, and cross-border flows—is valued at trillions of dollars. The U.S. and EU are among each other’s top partners in services, investment, and innovation. Disruptions or back-pedaling in policy alignment risk undermining the deep structural foundations of this relationship.
Politically, the findings from the survey will likely resonate in capitals on both sides of the Atlantic. Proponents of deeper U.S.–EU cooperation may lean on results like this to argue for more stable, rules-based engagement. Conversely, those favoring more nationalist or hedged policies may point to the skepticism even from corporate actors as justification for a cautious stance.
In sum, nearly half of the U.S. companies operating in Europe are sounding an alarm: they expect declining economic ties. Their expectations are rooted not just in deterioration of trust or geopolitics, but in concrete tensions around tariffs, regulations, supply chains, and enforcement. How both governments and businesses respond to these signals may well shape the trajectory of transatlantic integration in the years ahead.
(Source:www.usnews.com)