Amid escalating trade tensions and rising U.S. protectionism, European businesses are poised to refocus on intra-EU trade to offset declining exports to the United States according to a recent study by the auditing firm Deloitte.
The study projects that due to newly implemented U.S. tariffs, German exports to the U.S. could contract by an average of 3.2% annually, decreasing from €84 billion to €59 billion over the next decade.
Conversely, the study anticipates that exports to Europe’s ten largest trading partners will grow by 2.5% per year, potentially compensating for the U.S. market downturn.
Currently, these European markets collectively account for €357 billion in German exports—over four times the volume exported to the U.S.—and are projected to reach €467 billion by 2035.
Deloitte described the EU single market as a “sleeping giant” for German industry but fully realizing this potential requires the EU to dismantle existing non-tariff trade barriers such as divergent product regulations, complex tax systems, and varying packaging standards, which, according to the International Monetary Fund, can add up to a 44% surcharge on industrial goods.
The study suggests that eliminating half of these bureaucratic obstacles could boost annual growth in intra-EU trade by 1% by 2035. Complete removal of these barriers might even double the growth rate, providing a significant stimulus to European economies amid global trade uncertainties.
