cross-posted from: https://scribe.disroot.org/post/11386336
Full report: REDESIGNING SUPPLY CHAINS - EU FIRMS IN A TIME OF GEOPOLITICAL RISK - (pdf)
- Almost two-thirds of EU firms say they are prepared to manage geopolitical risks, according to new study.
- European single market acts as a buffer while companies active beyond EU diversify suppliers and markets, says report by EIB and European Commission.
- Tariffs and regulatory compliance overtake logistics and supply shortages as main trade obstacles.
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.”
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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.
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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.
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