Spillovers in the EU. Trade, Valuation Changes, and Uncertainty

This paper assesses the impact of recent tariffs, exchange rate dynamics, and uncertainty on EU’s economies. It quantifies cross-border impacts to support macroeconomic surveillance.

• US tariffs appear to have caused only limited direct damage to EU exports so far, but contributed to volatility and uncertainty
• The combination of weak Chinese demand and stronger Chinese export pressure emerges as a more persistent challenge
• Valuation effects related to dollar depreciation and financial market movements expose the euro area’s substantial holdings of US assets
• Uncertainty has a statistically significant negative impact on investment in in many Member States, with common shocks being more impactful

Information and identifiers

Institutional Paper 346. September 2026. Brussels. PDF. 48pp. Tab. Graph. Bibliogr. Free.

KC-01-26-042-EN-N (online)  
ISBN 978-92-68-39981-1 (online)  
ISSN 2443-8014 (online) 
doi:10.2765/6777742 (online) 
JEL classification : F10, C67, G15, E44, D81.

Disclaimer

European Economy Institutional Papers are important reports analysing the economic situation and economic developments prepared by the European Commission's Directorate-General for Economic and Financial Affairs, which serve to underpin economic policy-making by the European Commission, the Council of the European Union and the European Parliament. Views expressed in unofficial documents do not necessarily represent the views of the European Commission.