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An EU at the Crossroads
October 23, 2025 | Alison James, Global Electronics Association EuropeEstimated reading time: 1 minute
The European Union stands at a crossroads. Over the past several years, geopolitical shifts have been increasingly shaping regional approaches to industrial policy and supply chain resiliency. The European Union is no different in this respect; its policies continue to be shaped by geopolitical and geo-economic developments.
It can be no surprise that the EU-U.S. Trade Agreement has provided one more shock to the world order. In a recent report, the Global Electronics Association highlights that while the trade agreement restores a level of predictability between the two regions, providing a 15% baseline tariff for most European imports into the U.S., the new agreement does represent a paradigm shift in the world trading system.
As the new U.S. trade policy applies different rates to different countries (e.g., Vietnam, 20%, UK, 10%), this introduces an uneven playing field to the U.S. market. For global companies, this could lead to a review of their industrial strategy of where to produce what for the U.S. market.
Another important development in the EU is defence. While in the past, the larger part of EU Member States’ procurement has gone to non-EU suppliers, the invasion of Ukraine has led to initiatives that prioritise European defence production and supply. NATO has announced an increase in defence spending to 5% of GDP, and the EU has also announced budget mechanisms to grow defence spending. As we highlighted in our report to EU leaders, electronics are an essential enabler for most defence equipment and for the capability gaps the EU is seeking to fill. These developments offer a growing market for the wider electronics industry.
Continue reading this article in the October 2025 issue of PCB007 Magazine.
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