Critical input disruptions: Mapping out the road to EU resilience

Cătălin Roșioru

Global disruptions have highlighted the euro area’s reliance on foreign input sourcing. Using firm-level data for five EU member states, this column studies how disruptions to the supply of foreign critical inputs might affect value added. The findings suggest a 50% reduction in imports of such inputs from China and China-aligned countries would lead to transitory value-added losses in manufacturing of about 2-3%, with significant variation across firms, sectors, regions, and countries. This