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24 PCB007 MAGAZINE I OCTOBER 2025 F E AT U R E A RT I C L E by A l i s o n J a m es , G l o b a l E l e ct ro n i c s As s o c i a t i o n An EU at the Crossroads T he European Union stands at a crossroads. Over the past several years, geopolitical shifts have been increasingly shaping regional approaches to industrial policy and supply chain resiliency. The Eu- ropean Union is no different in this respect; its poli- cies continue to be shaped by geopolitical and geo- economic developments. It can be no surprise that the EU-U.S. Trade Agree- ment has provided one more shock to the world order. In a recent report 1 , the Global Electronics Association highlights that while the trade agree- ment restores a level of predictability between the two regions, providing a 15% baseline tariff for most European imports into the U.S., the new agreement does represent a paradigm shift in the world trad- ing system. As the new U.S. trade policy applies different rates to different countries (e.g., Vietnam, 20%, UK, 10%), this introduces an uneven playing field to the U.S. market. For global companies, this could lead to a review of their industrial strategy of where to produce what for the U.S. market. Another important development in the EU is defence. While in the past, the larger part of EU Mem- ber States' procurement has gone to non-EU suppli- ers, the invasion of Ukraine has led to initiatives that prioritise European defence production and supply. NATO has announced an increase in defence spend- ing to 5% of GDP, and the EU has also announced budget mechanisms to grow defence spending. As we highlighted in our report to EU leaders, electron- ics are an essential enabler for most defence equip- ment and for the capability gaps the EU is seeking to fill. These developments offer a growing market for the wider electronics industry. Another recent Association report 2 highlights the urgent need to strengthen Europe's industrial base for critical electronics, including PCBs, as the region pursues greater defence autonomy. The report brings together key findings from several studies on vulnerabilities in the European supply chain. There is a third major development. In the first half of 2026, the European Commission is sched- uled to revise the European Chips Act. A public