Tariffs Hit Differently: The Regional Impact of US Tariffs across Europe and the Role of the Single Market
with Gabriel Felbermayr, Sebastian Krantz, Hendrik Mahlkow and Joschka Wanner. Kiel Working Papers, 2309, December 2025. Invited for submission to the Journal of Economic Geography.
Changes in labor location under U.S. tariff shocks.
We study how recent U.S. tariffs ripple through European regions and how the EU Single Market cushions these shocks. Using a regionalized inter-country input–output framework with labor mobility, we embed 288 European NUTS2 regions in a global production network and quantify the heterogeneous effects of U.S. import protection.
Our counterfactuals compare outcomes under an integrated versus a fragmented Europe. Integration allows firms and workers to substitute along intra-EU value chains, which substantially lowers both average income losses and the dispersion of outcomes across regions. The results highlight how deep integration shapes the geography of trade policy exposure.
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