Oxford Economics warns of Trump’s trade policy impact on EU economy

Analysts at Oxford Economics predict a decline in business investment across the world’s largest economies, including the European Union, amid growing economic uncertainty. They attribute this shift largely to US President Donald Trump’s trade policies, which have disrupted global market stability.

According to Oxford Economics, this uncertainty could negatively affect global GDP growth, primarily through reduced business investments. Already this year, business investments in the eurozone and the UK have dropped by approximately 2%. The situation is further complicated by direct economic harm caused by US tariffs imposed by the administration.

The firm outlines potential outcomes for this scenario, ranging from a swift resolution to prolonged uncertainty lasting until 2029. In the worst-case scenario, business investments could plummet by 20% in China, 14% in the US, and 10% in the eurozone. Such declines would significantly hinder global economic growth.

Smaller EU member states heavily reliant on trade—such as Luxembourg, Slovakia, and Bulgaria—are particularly vulnerable. Even larger economies like Belgium and Italy face notable risks from this emerging negative trend.