Company: BBVXF
Filing Date: 2025-07-31
Form Type: 6-K
Source: 0000842180-25-000033
Chunk: 109

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-07-31
Form: 6-K
Chunk 109
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, among other reasons, the policies of the U.S. administration. Uncertainty surrounding their consequences is exceptionally high, substantially increasing geopolitical, economic and financial risks.

The recent significant increase in U.S. tariffs on imports has triggered financial market volatility, reinforcing global-wide risks. The level and duration of these tariffs, and uncertainty in connection therewith, could negatively impact the world economy, worsening the prospects for the macroeconomic environment. As a result of adopted or announced tariffs, global growth could decelerate significantly.

While fiscal stimulus and monetary easing measures could partially offset the impact of trade protectionism, particularly in the Eurozone, where significant public spending increases have been announced, the impact of higher U.S. tariffs could be amplified by the adoption of retaliatory measures by other countries, sustained uncertainty, weakening confidence levels and financial volatility, among other factors.

Increased tariffs also raise the risk of inflation in the United States, which has contributed to the Federal Reserve’s decision to keep interest rates unchanged in recent months and limited the scope for rate cuts in 2025. In the Eurozone, limited inflationary pressures have allowed the ECB to reduce the deposit facility rate to 2.0% in June 2025. While an additional rate cut is possible in the second half of 2025, the ECB may instead choose to keep rates unchanged.

Beyond higher import tariffs, tighter U.S. controls on migration flows could also affect the labor market, add to inflationary pressures and weigh on economic growth. The U.S. administration’s fiscal, regulatory, industrial and foreign policies, among others, could likewise contribute to financial and macroeconomic volatility.

Amid heightened uncertainty over U.S. policies and large fiscal deficits, the U.S. risk premium has recently increased, pushing up long-term sovereign yields and weakening the U.S. dollar. These developments could also spark episodes of volatility, especially given the high debt levels in both developed and emerging economies.

Rising trade protectionism and the growing U.S.-China rivalry could further heighten geopolitical tensions, especially against the backdrop of ongoing conflicts in Ukraine and in the Middle East. In response to these risks and the changes in the foreign policy of the U.S. administration, the European Union has adopted measures to increase military spending, which could support growth, while also adding to upward pressures on inflation and interest rates in the region.

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Overall, rising global geopolitical tensions increase uncertainty around the outlook for the world economy and the likelihood of economic and financial disruptions, including an economic recession