Part 3/10:
Several factors underpin this surprising economic performance, particularly two broad developments that have shifted expectations:
1. Europe's Industry and Trade Strategies
Contrary to widespread fears that US tariffs would significantly damage EU exports, European industries have held up better than anticipated. Early in the year, many firms increased exports to preempt tariff hikes, and despite a slowdown during the summer, export figures rebounded swiftly. Notably, following a late July agreement between Brussels and Washington on a 15% tariff on most EU goods—substantially lower than tariffs imposed on countries like India (50%) or Canada (45%)—European sectors gained a competitive edge.