- Almost two-thirds of EU firms say they are prepared to manage geopolitical risks.
- Tariffs and regulatory compliance have overtaken logistics and input shortages as the main trade obstacles.
- The single market acts as a buffer, while firms exposed beyond the EU continue to diversify suppliers and markets.
- Nearly 90% of EU firms expect exports to remain stable or increase despite mounting uncertainty.
European Union businesses increasingly see geopolitical disruptions as a structural feature of global trade and are redesigning supply chains accordingly, a new EU report finds.
Almost two-thirds – 64% – of EU firms consider themselves prepared to handle geopolitical risks, according to the study, which was carried out by the European Investment Bank (EIB) and the European Commission. Such preparedness differs by size, with the share being as high as 73% for the biggest companies and less than half for small and medium-sized enterprises (SMEs).
The report, entitled ‘Supply chains and the rise of geopolitical risks: EU firms in a fragmenting world‘, says businesses in Europe are also relying less on short-term crisis measures and gaining support from the European single market. The share of EU importers adjusting supply chains fell from 50% to 37% between 2023 and 2025 as stockpiling almost halved to 17%.
“Geopolitical uncertainty is no longer a temporary shock for European companies,” said Román Arjona, chief economist at the Commission’s Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW). “The encouraging finding is that firms are adapting by diversifying, investing in preparedness and using the single market as a source of stability. Reducing internal barriers and supporting businesses throughout the entire investment journey is essential to bolster European competitiveness in technologies and strategic sectors critical to the EU.”
The study finds that 67% of EU businesses trading with the United States and 60% of those engaged in commerce with China expect tariffs to remain a long-term obstacle.
The report draws on the latest EIB surveys of supply chains and investment activities. The most recent “Supply Chain Survey” covered 1,165 EU importers and exporters while the latest “EIB Investment Survey” covered about 12,000 European businesses along with 800 US firms.
The new study finds that the nature of supply-chain risk is changing. Between 2023 and 2025, the share of EU firms reporting obstacles fell from 27% to 8% for raw materials, from 15% to 3% for semiconductors and from 28% to 12% for logistics.
Over the same period, regulatory compliance and tariff concerns rose, with 20% of EU firms now flagging compliance with new regulations as a major obstacle and 18% pointing to customs and tariff changes.
Single-market strength
Businesses trading only within the EU have reduced emergency adjustments more sharply, highlighting the buffer role of the European single market. At the same time, companies sourcing beyond the EU are pressing ahead with investments aimed at reducing their exposure to future supply-chain disruptions.
“EU firms continue to show resilience in a challenging global environment,” said Laurent Maurin, Head of the Economic Studies Division at the European Investment Bank. “Just 21% of EU firms view supply-chain resilience as a competitive advantage, compared with 78% that cite product and service quality, and 57% that cite the skills of their workforce. Rising costs (74% of EU firms) and uncertainty (61%) remain the most frequently cited threats to competitiveness.”
Investing in competitiveness and resilience
Looking ahead, businesses in the EU regard advanced digital technologies, research and innovation as becoming increasingly important. Despite higher costs and uncertainty, almost 90% of EU firms expect export performance to be stable or to improve, although companies exporting to the US and China are less optimistic.
The report calls for a European policy mix that includes targeted financial instruments for geopolitical and trade risks, better early-warning systems, greater regulatory clarity, progress on EU trade agreements and deeper single-market integration. It also highlights the role of EIB support in strengthening innovation, digitalisation, skills and supply-chain resilience across Europe.
Background information
About the EIB
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It provides finance and expertise for projects that contribute to EU objectives. The EIB Group, which includes the European Investment Fund (EIF), works closely with public and private sector partners to support sustainable investment, job creation, economic growth and innovation across Europe.
About DG GROW
The Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) is the European Commission department that works to support a seamless and resilient single market with open borders and a free flow of goods and services. The department supports the competitiveness, growth and resilience of the EU economy while focusing on strengthening the leadership of European industries across different industrial ecosystems.
Press contacts
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