Nearly half of US companies in Europe expect declining economic ties, survey shows

A recent AmCham EU survey indicates improved sentiment among U.S. companies operating in Europe regarding transatlantic economic relations, with 46% now expecting deterioration, a significant decrease from 89% earlier this year, and a third anticipating stability following a late July EU-U.S. trade deal. Despite viewing the deal positively for averting severe damage, a majority (60% for U.S. policies, 56% for EU policies) still anticipate negative policy impacts, underscoring persistent concerns over tariffs and non-tariff barriers such as EU regulations on deforestation and supply chains.

Analysis

A recent survey from the American Chamber of Commerce to the EU reveals a significant, albeit cautious, improvement in sentiment regarding transatlantic economic relations among U.S. companies operating in Europe. The proportion of firms expecting a deterioration in trade and investment ties has nearly halved, falling to 46% from a peak of 89% in January. This shift is primarily attributed to a late-July trade agreement that averted a more severe conflict, with a third of respondents now anticipating stability. Despite this de-escalation, significant headwinds persist; a majority of companies still foresee negative impacts from policy environments in both the United States (60%) and the European Union (56%). Key unresolved issues include the new 15% U.S. import tariff on most EU products and the proliferation of non-tariff barriers, such as EU regulations concerning deforestation and supply chains, which remain a primary concern for member companies like Apple, Goldman Sachs, and Meta.

Key Decisions for Investors

• The improved sentiment and recent trade deal suggest a reduction in tail risk for U.S. multinationals with heavy European exposure, warranting a potential re-evaluation of these positions as the worst-case trade war scenario has been mitigated for the time being.
• Investors should remain cautious, as a majority of firms still anticipate negative policy impacts; monitor developments related to the 15% U.S. tariff and new EU non-tariff regulations, which could erode margins for exposed companies.
• Focus on companies with resilient global supply chains and strong pricing power, as these attributes will be critical for navigating the persisting tariff environment and increasingly complex EU regulatory landscape.