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Introduction
Trump is back in office second time. And while that’s mostly U.S. political news, it has real consequences for startups across Europe, especially in tech. His recent announcement to raise tariffs to 30% is just one example. For European founders, this means more than just economic uncertainty, especially given the strong trade relationship between the U.S. and the EU. Higher tariffs would make importing and exporting more expensive and complicated, which ultimately disrupts global supply chains.
For European startups, especially in tech, that can seriously disrupt operations, partnerships, and access to key markets. Moreover, it raises serious questions about fundraising, access to infrastructure, and the future of innovation in the region. Therefore, in this blog, we break down what a second Trump term actually means for the European tech startup and what founders should watch out for.
Trump 2.0: Tariffs, Tensions & the Impact on EU Startups
Trump’s return to office comes with a clear message: America first, again. And this time, he’s already made it clear by announcing a 30% tariff rise on key goods starting from August 1st. And he's not holding back. In fact, in a letter to the EU, he warned that any retaliation would backfire: With tensions escalating, the big question now is: what does this mean for European startups, especially in tech? Here are the key challenges founders and investors need to watch closely and what Europe must do to regain control. EU leaders are still preparing their response, but tensions are clearly rising.
With tensions escalating, the big question now is: what does this mean for European startups, especially in tech? Here are the key challenges founders and investors need to watch closely and what Europe must do to regain control.
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Investors Are Being More Careful
What that means for EU tech founders is that unlike before, investors will now be more hesitant to fund early-stage startups, especially those exposed to international supply chains. This is because the rising tariffs and threat of a US-EU trade war make global operations riskier. Investors tend to avoid uncertainty. Startups with dependencies on US-made components or cloud infrastructure may seem too fragile in this climate.
Harder Times for Tech Founders
Secondly, investors are investing their funds in more stable options like bonds, gold, or real estate. Instead of putting money into fast-scaling tech or unstable in the rise of uncertainty. This makes it harder for early-stage founders to raise money. Moreover, the bar is getting higher. Investors are asking more questions and holding back unless they see strong proof of growth or revenue.
Funding Rounds Are Taking Longer
Thirdly, it may take longer for EU founders to close funding rounds and when they do, valuations might be lower. With reduced risk appetite, VCs are taking longer to decide and negotiating harder. Startups that raised at a $100M valuation last year may now be asked to accept half that, even if revenue hasn't changed. This could lead to down rounds, tighter budgets, and a need to show profitability earlier than planned.
Trump’s tariff increase and warning have led EU founders, investors, and policymakers to start discussing their heavy dependence on US-made technology and services. However, this isn’t just about a trade war or short-term politics. It’s about Europe’s tech ecosystem that has been built on foundations it doesn’t fully control. And now, that’s becoming a real risk. Founders are asking: what happens if access to chips, cloud, or capital suddenly gets cut off? What if "business as usual" never returns?
How Can Europe Take Control Back
Time to Build Europe’s Own Tech Stack
Most of the AI infrastructure that European startups rely on today. For example, cloud storage to GPUs is built and owned by American giants. And that makes the entire ecosystem fragile. If access becomes restricted or prices go up due to tariffs or political shifts, European companies are left scrambling. Without a strong foundation of its own, Europe’s tech future will always rely on decisions made somewhere else.
This moment is pushing founders and policymakers to rethink that model. The focus is shifting toward sovereign capability: local manufacturing, local data centers, and even local search and security tools. Ecosia teaming up with Qwant is one example, and it has to be taken more seriously now.
Unify the Startup Landscape Across EU
Right now, it’s still too hard for startups to scale across Europe. If a startup from France wants to expand to Germany, they face different regulations, tax systems, and even language barriers. It doesn’t feel like one unified market.
As Joséphine Bitouzet put it, “People often say that Europe is a single market, but for start-ups, this is not yet the case.” That’s a big problem if Europe wants to build strong, independent tech leaders. What’s needed is a real effort to remove those roadblocks, shared digital rules, faster approvals, and fewer local hurdles. If the EU wants startups to stay and grow here, it has to feel like one home, not 27.
Invest and Fund Local Ideas
For years, a big chunk of Europe’s VC money has come from the U.S. But now, with growing global tensions and uncertainty, it’s clear Europe needs to focus more on its own funding sources. Investors also That means local investors need to step up not just with capital, but with long-term belief in the region’s potential. Instead of waiting for what’s coming from Silicon Valley, it’s time to fund the next big ideas growing right here at home. European startups don’t lack talent or ambition. What they need is stronger local support to scale, compete, and lead on a global level.
Conclusion
Trump’s second term is a wake-up call for Europe’s tech ecosystem. It’s time for founders, investors, and policymakers to rethink how startups are built, funded, and scaled within the EU. Relying on the U.S. for capital, infrastructure, and tech is no longer a sustainable path forward. The potential is already here in Europe; what’s needed now is the will to act.
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