EU Single Market Reform: A Shield Against a U.S. Trade War?

Can Brussels Build a Stronger Fortress Before Washington Strikes?

As economic nationalism resurfaces in Washington, the European Union finds itself at a crossroads. Some argue that the only way forward is to fix the EU Single Market, but is it really that simple? The recent launch of the Competitiveness Compass—a strategy to strengthen the EU’s Single Market—comes at a time when the U.S. is signaling an aggressive turn in trade policy. With tariffs already imposed on Mexico, Canada, and China, and new threats directed at Europe, Brussels must decide whether deepening economic integration can serve as a shield against external shocks.

According to estimates from European Parliament research, removing remaining barriers could boost EU competitiveness by €713 billion by 2029, accelerate economic growth and innovation, and reduce dependency on external resources. However, the path forward is not without challenges. The reforms would require sacrificing some national sovereignty, addressing "integration fatigue," and overcoming fragmented legal frameworks. Additionally, strengthening the Single Market could be perceived as protectionist, potentially escalating trade tensions with the U.S. at a time when it is taking steps to reduce its economic dependence on China.

As Brussels moves forward, the question remains: Can it balance the risks of reform with the pressures of geopolitical and economic competition? Let’s break it down.