Overview 2

1. State of play on US tariffs (cut-off date: 25 February 2026) 4

1.1 Timeline of recent EU-US trade developments 4

1.2 EU countermeasures toolkit 5

1.3 Rationale of the Trump administration’s trade policy 7

2. Economic impact of US tariffs on the EU 9

2.1 Overall impact on GDP 9

2.2 Country-specific and sectoral impact 9

2.3 Impact on US, and EU spillovers 10

2.4 Trade diversion effects 13

3. Financial market repercussions 14

3.1 Currency markets 14

3.2 Equity markets 14

3.3 Bond markets and sovereign risk 15

3.4 Banking sector exposure 16

3.5 Monetary policy implications 18

4. Policy implications for the EU 20