A growing number of global investors are shifting their focus from the U.S. to Europe, driven by growing instability in U.S. trade policies under President Donald Trump. Peter Roessner, CEO of Luxembourg-based hydrogen company H2Apex, emphasized the planning uncertainty in the U.S. market due to erratic tariff threats. He noted that although Europe is not perfect, its relatively stable regulatory environment has become more attractive for investors, particularly in sectors like renewable energy.
This shift is not isolated. Multiple executives and fund managers confirm that Trump’s unpredictable trade decisions and executive orders are causing anxiety among market participants. Investors who once favored America’s capital-market-friendly environment are now seeing Europe as a safer option, thanks to its infrastructure and defense investment programs. Trump’s latest threat of 50% tariffs on EU goods without a trade deal by July 9 has only intensified the exodus.
Capital flows underscore this trend: European equity funds have attracted over $100 billion so far in 2025, triple last year’s figure, while U.S. funds have seen $87 billion in outflows. Even as Wall Street posts record highs, sentiment toward U.S. investments remains shaky. The recent lackluster IPO of Amrize, the U.S. offshoot of Holcim, contrasts sharply with Holcim’s 15% stock surge focused on Europe and emerging markets.
Direct foreign investment into Germany has also surged, more than doubling to €46 billion in early 2025, the highest since 2022. German firms have pulled capital out of the U.S., suggesting a broader realignment. Siemens Energy and Deutsche Bank executives noted increasing global investor interest in Europe, but warned that confidence hinges on the EU’s ability to maintain and improve its investment climate.
Despite this optimism, experts caution that Europe’s window of opportunity may be short-lived. Investors like KfW’s Stefan Wintels and Altor’s Hajo Kroesche urge EU policymakers to act swiftly, improve regulation, and follow through on spending commitments. The message is clear: Europe must capitalize on current momentum or risk losing investor confidence just as quickly as it gained it.
Source: Reuters