Shifting Alliances and Rising Risks
Fecha: July 2025
Funcas Intelligence, July 2025
Sumario
The ECB continues its easing trajectory while the Fed points to conditional openness to policy shifts, creating growing transatlantic monetary divergence. Inflation and economic growth remain asymmetrical, complicating central bank mandates globally.
The U.S.'s role as the global financial anchor is under pressure due to concerns over dollar weaponization, rising de-dollarization efforts, fiscal instability, and doubts about Fed independence, creating opportunities for other countries to play a greater role, but also creating risks. The EU appears well-positioned to partially capitalize on this evolving landscape, however, it also faces numerous constraints that will limit its growth.
Europe’s electric vehicle industry is being squeezed by China’s state-backed EV promotion policies and the rising protectionism in the United States at a time when Brussels is seeking to meet its climate neutrality goals. These geopolitical tensions are forcing EU policymakers and carmakers to evaluate options to mitigate or reduce their exposure to these pressures.
The new U.S. fiscal legislation is forecast to lead to marked deterioration in the U.S. fiscal position, prompting rating agencies to further downgrade the United States sovereign rating. Mounting debt, limited appetite for fiscal responsibility, and higher long-term interest rates risk permanently damaging the attractiveness of U.S. assets.
UK Prime Minister Keir Starmer is recalibrating Britain’s global posture through trade agreements with the EU and the U.S. to restore stability and strategic influence following Brexit. While most of these deals have not yet been finalized and are not expected to yield significant economic returns, they mark a shift in the government’s approach in an increasingly volatile geopolitical landscape.