European Union (EU) businesses are increasingly treating geopolitical disruption as a structural feature of global trade and redesigning supply chains accordingly, with 64 per cent of firms saying they are prepared to manage geopolitical risks, according to a new study by the European Investment Bank (EIB) and European Commission.
Preparedness varies by company size, with 73 per cent of the largest firms saying they are equipped to manage geopolitical risks, compared with less than half of small and medium-sized enterprises (SMEs). The report, ‘Supply chains and the rise of geopolitical risks: EU firms in a fragmenting world,’ also found that the share of EU importers adjusting supply chains fell from 50 per cent in 2023 to 37 per cent in 2025, while stockpiling almost halved to 17 per cent.
The nature of supply-chain risks is also shifting. Between 2023 and 2025, the share of EU firms reporting obstacles fell from 27 per cent to 8 per cent for raw materials, from 15 per cent to 3 per cent for semiconductors and from 28 per cent to 12 per cent for logistics. In contrast, 20 per cent of firms now cite compliance with new regulations as a major obstacle, while 18 per cent flag customs and tariff changes.
Tariffs are expected to remain a long-term trade obstacle by 67 per cent of EU businesses trading with the US and 60 per cent of those engaged in commerce with China. Companies sourcing beyond the EU are also investing to reduce exposure to future supply-chain disruptions, while businesses operating within the single market are making fewer emergency adjustments, highlighting its role as a buffer.
Despite geopolitical uncertainty and higher costs, almost 90 per cent of EU firms expect export performance to remain stable or improve, although companies exporting to the US and China are less optimistic. Rising costs, cited by 74 per cent of firms, and uncertainty, cited by 61 per cent, remain the leading threats to competitiveness.
The report said businesses increasingly see advanced digital technologies, research and innovation as important to competitiveness and resilience. It called for targeted financial instruments for geopolitical and trade risks, stronger early-warning systems, greater regulatory clarity, progress on EU trade agreements and deeper integration of the European single market.
EU businesses are redesigning supply chains as geopolitical risks become a structural feature of global trade, an EIB-European Commission study finds.
While 64 per cent of firms feel prepared, trade obstacles are shifting from raw materials and logistics to tariffs and regulatory compliance.
Supply-chain adjustments also fell, while firms invest in diversification and resilience.
Fibre2Fashion News Desk (CG)
