European policymakers are losing faith in American business

FOR much of the past three decades, American companies operating overseas benefited from a powerful assumption: that despite periodic political turbulence at home, the US remained a predictable and broadly reliable commercial partner.

That assumption is now under growing strain in Europe.

US President Donald Trump’s increasingly aggressive foreign policy posture is doing more than unsettling markets or complicating diplomacy. It is reshaping how European policymakers assess American business as a whole. US businesses are finding themselves exposed to political risk that originates not from their own conduct, but from Washington’s treatment of allies.

For European policymakers, the Greenland episode reinforced a broader concern that US trade and foreign policy are becoming more openly transactional, less constrained by established norms, and more willing to use economic leverage to pursue geopolitical goals.

And now, there is the conflict in Iran.

Deep political shifts with commercial consequences

Penta’s intelligence research in late 2025 illustrates the scale of the reputational impact already underway before the US and Israel struck Iran.

Among EU policymakers, favourability towards US business fell sharply over a year – from 72 per cent to 44 per cent. In Brussels, American companies dropped from the fourth most favourably viewed business community to ninth, ranking only marginally ahead of companies from China, Saudi Arabia and Russia.

For global businesses accustomed to viewing the EU as a stable and rules-based market, this shift should not be underestimated. Policymaker sentiment matters. It influences regulatory discretion, enforcement priorities, procurement decisions and – ultimately – the ease with which companies can operate across borders.

Singapore, in particular, sits at the intersection of these dynamics. As regional headquarters for many US multinational corporations and a critical node in global supply chains linking Europe and Asia, it is especially exposed to changes in how jurisdictions assess political and reputational risk.

The breadth of the reputational decline is striking. American companies are increasingly being viewed through a political lens, regardless of sector or corporate behaviour. The distinction between US policy and US business in Europe is eroding.

The implications extend well beyond tariffs. While trade measures attract immediate attention, the more enduring risks are structural: heightened regulatory uncertainty, slower decision-making, supply-chain disruption and a more politicised environment for cross-border investment.

Less visible, but equally important, are second-order effects on markets and consumers. As political tensions rise, public sentiment can shift quickly. Deteriorating brand perceptions of US companies in Europe or among European firms in the US can affect demand, partnerships and pricing power even without formal trade barriers. Reputational damage is often harder to diagnose and slower to reverse than regulatory ones.

Penta’s monitoring found a marked increase in negative commentary about the US across European media in recent weeks. That matters because media narratives shape the broader information environment in which policymakers, investors and corporate stakeholders operate.

The moment is also delicate for Asean economies. Many depend on deep commercial ties with both the US and Europe while seeking to avoid entanglement in great-power disputes. As economic relationships become more politicised, that balancing act grows harder and costlier.

At the more forceful end of the spectrum lies the European Union’s Anti-Coercion Instrument. Originally designed to counter economic pressure from China and Russia, it is now discussed as a potential option in disputes with Washington.

Why this matters in Asia

For Singapore and other highly open, trade-dependent economies, these developments warrant close attention. The global trading system depends not only on formal rules, but on trust – that economic ties will not be routinely weaponised, and that businesses will not become proxies in geopolitical disputes. When that trust weakens among major economic blocs, the spillover effects are felt worldwide.

Boards and senior executives should be asking three questions.

First, are they treating geopolitics in Europe as a reputational risk, or primarily as a policy issue? US government actions are increasingly being attributed – fairly or not – to US businesses themselves, with implications for trust, access and influence.

Second, do European stakeholders clearly understand what these companies stand for? Businesses that have not articulated their independence from US foreign policy and their long-term commitment to European markets should assume others are shaping that narrative in their absence.

Third, are companies prepared for sustained friction? Even without new tariffs, they may face slower approvals, tougher scrutiny and reduced goodwill. Over time, this can quietly but materially affect performance.

For Asia-based leadership teams, there is the question of how exposed regional operations and reputations are to political decisions made far beyond the region. Companies managed from Singapore may feel the effects of European scepticism even as their Asia businesses remain commercially sound.

None of this suggests that Europe is disengaging from American business. The transatlantic economic relationship remains deep. But the era of automatic goodwill is fading. In its place is a more conditional and sceptical posture – one that demands companies to manage actively.

For global businesses watching from Asia, the message is sobering. In a world where geopolitics and commerce are tightly intertwined, market access alone is no longer enough. Companies also need local credibility and reputational resilience which are far harder to restore once lost.

The writer is a partner at Penta Group, a global advisory firm specialising in stakeholder intelligence and geopolitical risk