Investors shift to Europe amid uncertainty over Trump’s trade policies

Reuters

As U.S. President Donald Trump’s tariff threats shake confidence in the American market, as investors increasingly turn to Europe, drawn by its relative political stability and infrastructure-driven economic agenda.

Investor interest in Europe is rising sharply, as growing concerns over President Donald Trump’s unpredictable trade policies drive capital away from the United States. Executives and fund managers cite planning uncertainty and tariff threats as key reasons behind the shift.

Peter Roessner, CEO of Luxembourg-based hydrogen firm H2Apex, said U.S. instability is pushing both American and European investors to focus on the EU market.

“Conditions in Europe aren’t perfect, but they’re stable,” he told Reuters.

More than $100 billion has flowed into European equity funds this year — triple last year’s figure — while U.S. funds saw outflows nearing $87 billion, according to LSEG data.

Investors also responded coolly to the U.S. debut of Holcim’s spin-off Amrize, while Holcim’s Europe-focused stock rose 15%. Siemens Energy’s shares climbed 84% amid renewed investor confidence in EU markets.

The European Central Bank President, Christine Lagarde, noted this momentum reflects growing trust in Europe's long-term value.

Germany has seen a surge in foreign investment, with inflows more than doubling to €46 billion ($53 billion) in early 2025. Meanwhile, German companies reduced exposure to the U.S., posting a negative €2.38 billion ($2.78 billion) in direct investment in April alone.

Still, experts warn Europe must act swiftly. “This sentiment can reverse,” said KfW CEO Stefan Wintels, urging European Union leaders to accelerate regulatory reforms and fulfill spending promises.

Deutsche Bank CEO Christian Sewing, after meetings in the Gulf, confirmed strong investor interest in Europe but stressed that long-term confidence depends on continued political and economic stability.

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