European exports in geopolitical storms

With demand from US and China weakening, the EU can boost trade by focusing on other markets and strengthening global partnerships

Publishing date: 30 September 2025
Authors: Niclas Poitiers Madalena Barata da Rocha Nicolas Boivin

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The global trading system is undergoing profound changes, and current developments in the US and China will have significant implications for the European economy. Both countries were at the heart of globalisation but are now becoming less dynamic export markets. Chinese economic growth is expected to slow down as pressures on the economy accumulate. In the United States, trade policy has taken a sharp inward turn.

For the EU, these shifts point to structurally weakening demand growth from two of its largest trading partners, which together account for nearly 30 percent of all EU-generated value-added exports.

However, in this paper we show that the growth of EU exports is driven to a much greater extent by demand in other markets, and we argue for a stronger policy focus on the 70 percent of EU value added in trade with other partners. While reduced demand from the US or China would pose challenges – especially for highly exposed sectors like pharmaceuticals – there remains substantial scope for the EU to diversify and expand trade with the rest of the world.

The EU already has an extensive network of trade agreements, covering 74 percent of trade with partners other than the US and China. Deepening these relationships and forging new partnerships should be priorities. Offering a stable and rules-based trade regime can help offset losses from reduced integration with the US and China.

The authors thank André Sapir for the valuable comments and Ella Joyce Bullock-Papa for her outstanding assistance.

The project “Rethinking Global Supply Chains: measurement, impact and policy” (RETHINK-GSC) has received funding from the European Union’s Horizon Europe research and innovation programme under grant agreement number 101061123.

About the authors

Niclas Poitiers

Niclas Poitiers, a German citizen, joined Bruegel as a Research Fellow in September 2019.

Niclas' research interests include international trade, international macroeconomics and the digital economy. He is working on topics on e-commerce in trade as well as European trade policy in global trade wars. Furthermore he is interested in topics on income inequality and welfare state policies.

He holds a Ph.D. in Economics from Universitat de Barcelona, a M.Sc. in economics from the Universität Bonn, and a B.Sc. from Universität Mannheim. During his Ph.D. he was a visiting scholar at Northwestern University.

Niclas is fluent in English, Spanish, and German.
Madalena Barata da Rocha

Madalena joined Bruegel as a Research Assistant in March 2025. She holds a bachelor’s and a master’s in Economics from Nova School of Business and Economics. In her MSc dissertation, she focused on estimating and quantifying fiscal multipliers in Portugal, with the objective of contributing to a better understanding of fiscal policy effects. Her research applied VAR models and Local Projections methods, comparing their performance in assessing fiscal policy impacts.

Prior to joining Bruegel, Madalena interned at the Central Bank of Portugal, where she contributed to the production of statistics and indicators on the Portuguese financial sector within the Monetary and Financial Statistics Unit. She later gained experience in consulting, working on financial sector regulation topics. Additionally, she worked as a Research Assistant on topics related to public finances management.

Madalena is fluent in Portuguese and English, speaks conversational Spanish and is currently learning French.
Nicolas Boivin

Nicolas joined Bruegel as a Research Assistant in September 2024 until June 2025. Previously, he worked in foreign affairs as a graduate trainee at the Embassy of Switzerland in Ireland, covering the economy, bi- and multilateral trade and electoral politics.

He earned his two master’s degrees in economics and political science at the London School of Economics (LSE) and the Universitat Pompeu Fabra (UPF). As an undergraduate, he studied analytic philosophy at King’s College London. His MSc dissertation at the LSE developed a game theoretic model to analyse inclusion and exclusion decisions in political groups. At UPF, his MSc project quantified the causal impact of a major childcare reform in New York on women’s labour force participation.

Nicolas is a native English and German speaker and has a working knowledge of French