"US tariffs may be squeezing Europe's trade balance, but they are also pushing governments and businesses to spend big on keeping tech closer to home. A new forecast from Forrester says that European tech spending will climb 6.3 percent in 2026, lifting the continent's tech bill above €1.5 trillion for the first time, as governments and enterprises pour cash into AI, cloud, cybersecurity, and the infrastructure needed to run them without leaning quite so heavily on US providers."
"US tariffs are already causing problems, and Ireland is feeling it more than most thanks to its reliance on US multinationals. The knock-on effect is a smaller EU trade surplus and slower growth in the countries most exposed. Even so, Forrester expects the wider EU economy to hold its nerve, with real GDP growth in 2026 matching 2025, supported by strong intra-European trade and a steady ramp-up in defense spending."
"That resilience is showing up most clearly in tech budgets. Hardware leads the charge, with spending forecast to jump 14.3 percent as organizations scramble to buy AI-optimized servers and supporting infrastructure. Software follows closely behind, with an 11.2 percent increase driven by demand for cybersecurity tools and public cloud platforms. IT services growth lags at 3.7 percent, a gap that suggests a broader shift toward owning critical capabilities rather than renting them indefinitely from hyperscalers."
European tech spending will climb 6.3 percent in 2026, lifting total tech investment above €1.5 trillion as governments and enterprises fund AI, cloud, cybersecurity, and supporting infrastructure. US tariffs are reducing EU trade balances and weighing on countries with heavy US multinational presence, especially Ireland, contributing to a smaller EU trade surplus and slower growth where exposure is greatest. Real GDP growth in 2026 is projected to match 2025, supported by intra‑European trade and rising defense expenditures. Tech budgets emphasize hardware (+14.3%) and software (+11.2%) while IT services grow modestly (+3.7%), signaling a shift toward owning critical capabilities and investing in sovereign cloud, AI‑ready infrastructure, and data residency.
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