European Export Competitiveness Set to Decline in 2026 Amid US Tariff Convergence

Analytical reports indicate that while the 2025 US tariff shock was historic, its impact on Europe was initially cushioned by even higher tariffs imposed on rival suppliers. However, Europe’s competitiveness is projected to deteriorate significantly in 2026 as US tariffs converge toward a flat 15% for most global trading partners. European exports have already begun to decline amid rising trade barriers and heightened economic uncertainty. The loss of the relative advantage held in 2025 is expected to place additional strain on the European Union's trade balance. Analysts suggest that this shift in US trade policy poses a substantial threat to the continent's economic growth over the next two years. Consequently, these headwinds are likely to weigh heavily on the EUR/USD exchange rate and major equity indices such as the DAX.