European policymakers are losing faith in American business, with lasting reputational damage

President Donald Trump’s aggressive foreign policy stances, most recently linked to the dispute over Greenland, are not just rattling markets. They are reshaping perceptions in Brussels. As Washington’s rhetoric hardens, US companies are finding themselves collateral damage in a confrontation largely beyond their control.

The latest jolt came over the weekend, when Mr Trump announced an additional 10 per cent tariff on exports from eight European countries which could escalate to 25% by the summer.. The justification was familiar: those governments, he argued, were standing in the way of US ambitions to take control of Greenland. The move landed in an already fragile global trade environment — and it has further eroded trust in the United States as a commercial partner.

Exclusive research by Penta, conducted late last year before the subsequent flare-ups in Venezuela and the most recent escalation over Greenland, illustrates the scale of the shift and impact US policy was having on EU policymakers before the latest crisis. Favourability towards US business among EU policymakers fell sharply, dropping 28 percentage points — from 72 percent to 44 percent. In the space of a year, American companies slid from the fourth most favourably viewed business community in Brussels to ninth, now ranking only marginally ahead of firms from China, Saudi Arabia and Russia.

That reputational decline matters. For companies operating across the Atlantic, volatility is no longer a peripheral risk but a central strategic concern. There is growing evidence that US firms are absorbing the political blowback from Mr Trump’s confrontational approach to allies. The challenge is not simply the immediate threat of tariffs, but the longer-term consequences of a sustained deterioration in Europe-US relations.

Those consequences are wide-ranging: trade uncertainty, regulatory unpredictability, supply-chain disruption, and a more overtly politicised environment for cross-border investment and commercial activity. Less visible, but potentially just as damaging, are indirect market effects. 

As political tensions intensify, customer sentiment and brand perceptions can shift quickly. A hardening of public attitudes towards US companies in the EU — or European firms in the US — risks affecting demand, partnerships and pricing power even in the absence of formal trade barriers. Companies need to be watching this.

There are early signs this dynamic is already taking hold. Penta’s monitoring shows a marked increase in anti-US commentary across European media channels over the past month, suggesting that political friction is bleeding into the broader information environment in which companies operate.

Policymakers, meanwhile, are scrambling to respond. EU ambassadors convened an emergency meeting on Sunday evening to assess their options. While no decisions were taken, the menu was broad: renewed diplomatic efforts to de-escalate tensions; retaliatory tariffs on US exports; or, at the sharp end, activation of the EU’s Anti-Coercion Instrument — a tool designed to combat Russian and Chinese threats but available for moments like this.

A summit of EU leaders has been scheduled for Thursday, with further senior-level meetings in Brussels in the days ahead. The issue will also loom over the World Economic Forum in Davos this week, where executives and policymakers will be trading reassurances in private even as the public mood continues to sour.

For US business, the lesson is uncomfortable but clear. In a world where geopolitics and commerce are once again tightly entwined, political risk is no longer abstract — and reputational damage can accumulate faster than tariffs are imposed.

Three key questions all US businesses should be asking themselves:

1. Are we treating geopolitics as a reputational risk in Europe, or still as a policy issue?

Boards should challenge whether management recognizes that US government actions are increasingly being attributed to US companies themselves, with direct implications for trust, access, and influence in Europe.

2. Do our European stakeholders clearly understand who we are, and who we are not?

If the company has not explicitly articulated its independence from US foreign policy and its long-term commitment to Europe, boards should assume others are filling that vacuum.

3. Are we prepared for sustained friction, not just formal retaliation?

Boards should test whether the company is ready for slower decisions, tougher scrutiny, and reduced goodwill in Europe, even in the absence of new, unpredictable tariffs or responsive trade actions.