The price of gold hits record highs on the back of U.S.-EU trade tensions ...

Core Insights - The European business lobby group, BusinessEurope, indicates that the negative impact of U.S. tariff policies and escalating trade tensions on European companies is expected to significantly worsen by 2026 [1] Economic Impact - The survey reveals that the overall economic growth of the Eurozone has been only slightly affected this year, with a reduction of approximately 0.03 percentage points due to trade frictions [1] - By 2026, the impact of trade tensions is projected to increase, potentially dragging down Eurozone economic growth by 0.5 to 0.6 percentage points as temporary coping strategies lose effectiveness [1] Future Outlook - The organization warns that if the U.S. and Europe fail to reach a resolution on key trade disputes by the end of this year, there could be a chain reaction leading to further reductions in corporate investment, decreased capacity utilization, and pressure on the job market next year [1]

Core Viewpoint - The negative impact of U.S. tariff policies and escalating U.S.-EU trade tensions on European businesses is expected to significantly intensify by 2026, with economic repercussions projected to be several times greater than in 2025 [1][2] Group 1: Economic Impact - In 2025, the overall economic growth of the Eurozone will be only slightly affected, with GDP growth expected to narrow by approximately 0.03 percentage points due to proactive measures taken by businesses [1] - By 2026, the substantial impact of trade tensions is anticipated to manifest, potentially dragging down Eurozone GDP growth by 0.5 to 0.6 percentage points as temporary coping strategies lose effectiveness [1] Group 2: Sectoral Vulnerability - The manufacturing sector in the Eurozone, particularly in industrial powerhouses like Germany, Italy, and France, is expected to face significant downward risks due to high reliance on export and global value chain integration [1] Group 3: Future Risks - If the U.S. and EU fail to establish a mechanism to ease key trade disputes by the end of 2025, there may be a chain reaction leading to further contraction in corporate investment, decreased capacity utilization, and pressure on the labor market in 2026 [2] - The survey did not account for potential new tariffs or non-tariff barriers, indicating that the actual impact could be even more severe [2]

Group 1 - Italy is facing dual pressures from the US-EU trade tensions, including a proposed 30% tariff on EU goods and a weakening dollar impacting export competitiveness [1][2] - Italy's exports to the US account for 10% of its total exports, with a trade surplus of €39 billion expected in 2024, indicating a higher dependency on the US market compared to the EU average [2][3] - The sectors most affected by the tariffs include beverages, automobiles, and other transportation equipment, with the average tariff impact on Italy being higher than the overall EU level [2][3] Group 2 - If the 30% tariff is implemented, Italy's exports to the US could decrease by nearly 20%, resulting in an economic loss of €12.4 billion [3] - The weakening dollar is creating an "invisible tax" on Italian exports, making US goods cheaper and foreign goods more expensive, which could further exacerbate the impact of any additional tariffs [4][5] - In May, Italy's imports from the US grew by 18.5%, while exports only increased by 2.5%, highlighting the adverse effects of the currency exchange rate [5] Group 3 - Over 6,000 Italian companies are directly exposed to the risks posed by increased US tariffs, with small and medium-sized enterprises being the most affected [6] - The export sector is crucial for Italy's economy, and the combination of tariffs and currency issues could lead to significant economic repercussions [7] - There is a risk that companies may relocate production to the US due to the declining attractiveness of investment in Europe [7]