Investor confidence is pivoting toward Europe as the region’s relative political and regulatory stability becomes increasingly attractive compared to the uncertainty surrounding U.S. trade policy, especially under President Donald Trump’s renewed tariff threats.
🔄 Shift in Capital Flows:
According to LSEG Lipper, over $100 billion has flowed into European equity funds year-to-date — tripling inflows from the same period last year. Meanwhile, U.S. equity funds recorded outflows of $87 billion, more than double the year-ago pace.
💬 Executive Insights:
“Investors are now focusing more on the European market due to the absolute uncertainty and planning insecurity in the USA,”
said Peter Roessner, CEO of H2Apex, whose €200M hydrogen project in Germany is pivoting away from U.S. suppliers.
“Europe may not be perfect, but it’s stable,” echoed by executives and fund managers across recent investor conferences.
📉 Market Reflections:
🇨🇭Holcim’s European-focused stock is up 15% YTD
🇺🇸Amrize, its U.S. spin-off, flopped at IPO
🇩🇪Germany saw FDI more than double to €46B (Jan–Apr 2025), highest since 2022
🇩🇪 German firms recorded net divestments in the U.S. in 3 of the first 4 months this year
⚠️ Tariffs & Trade Deadline Looming
With a July 9 deadline approaching for a new trade deal — and Trump threatening 50% tariffs on EU goods — investors are hedging their bets early.
⚙️ Structural Momentum, But Urgency Remains
While the ECB’s Christine Lagarde sees this as a “vote of confidence” in Europe, others warn the window is limited.
“This momentum must be used wisely — sentiment can quickly turn,” said KfW CEO Stefan Wintels.
Private equity leaders and global banks — including Deutsche Bank — note surging interest from Middle Eastern capital, but stress the need for regulatory clarity and long-term consistency.
Bottom Line:
In an era of unpredictable U.S. policy and fragile global supply chains, Europe’s stability is becoming its competitive edge — but to retain investor trust, execution on reforms and investment pledges must accelerate.
