US tariff agreement affects regions in different ways

The European Union is negotiating a trade agreement with the US. The broad outlines have been in place since 27 July 2025. What does this agreement mean for prosperity in regions ranging from western Ireland to Cyprus, and from northern Sweden to Sicily? Researchers commissioned by the Foundation for Family Businesses have looked into this question.

Munich, 4 August 2025. A trade agreement with the US is more beneficial than an escalating trade war. However, the agreement concluded in Scotland a week ago has consequences. As this interactive graphic shows, a unilateral tariff of 15 percent on European goods leads to a decline in imports, exports and gross domestic product (GDP).

The scenario analysis was created by a team led by trade economist Professor Gabriel Felbermayr, Director of the WIFO institute of economic research in Vienna, in collaboration with the Kiel Institute for the World Economy. As early as June, the Foundation for Family Businesses had already published a comprehensive analysis with the same institutes, which outlined the impacts of several tariff scenarios that were conceivable at the time.

Effects of trade policy measures vary across regions

The results clearly show that the effects of trade policy measures vary across regions. Rural areas show different outcomes compared to industrial centres. Winners and losers are unevenly distributed.

It seems questionable whether the agreement will ultimately be beneficial for the EU. While the agreement reduces uncertainty for businesses and brings tariff advantages in certain sectors compared to the status quo, it lacks a deeper alignment on regulations and non-tariff trade barriers. A more comprehensive agreement providing legal certainty and removing existing obstacles would have been very important, particularly for family businesses in the EU.

Family businesses often do not have production sites in the US and therefore have difficulty avoiding tariffs. At the same time, they are often dependent on the US as a key sales market. Redirecting exports to alternative markets is difficult for them because they tend to offer highly specialised products whose demand depends on the industrial structure of the importing country.