US–EU financial ties present why neither facet can decouple | EUROtoday

US President Donald Trump argues that the US economic system is deprived in international markets and desires to scale back the commerce deficit by tariffs. Taken collectively, the 27 member states of the European Union kind the United States’ largest buying and selling accomplice.

Below are the important thing questions and solutions on commerce disputes and mutual dependence.

How giant is commerce between the EU and the US?

Together, the EU and the US account for greater than 40% of world financial output and almost one-third of world commerce. In 2024, they exchanged items value greater than $975 billion (€867 billion).

Including companies, complete transatlantic commerce reached €1.68 trillion ($1.97 trillion), in keeping with a report by the European Council, the physique representing EU heads of state and authorities.

Does the US run a commerce deficit with the EU?

Yes. The US imports considerably extra items from the EU than it exports to the bloc. The deficit widened from €156 billion in 2023 to €197 billion in 2024.

On a worldwide scale, the US commerce deficit totaled roughly $1.17 trillion, in keeping with the US Census Bureau.

The EU posts sizable surpluses in autos and prescribed drugs. The US, in contrast, runs surpluses solely in oil, fuel and coal.

What about commerce in companies?

In companies, the US data a considerable surplus, pushed by the rising dominance of tech giants resembling Apple, Amazon, Microsoft, Meta and Google.

Financial and IT-related companies, notably licensing revenues, additionally play a significant position. In 2024, the US companies surplus with the EU amounted to €148 billion.

When items and companies are mixed, the general US deficit shrinks to round €50 billion. The transatlantic commerce relationship is due to this fact way more balanced than Trump usually suggests.

Where is the US weak in commerce disputes?

Given the rising significance of digital companies, tariffs or taxes on this space may hit the US notably arduous. The EU may act by its so-called Anti-Coercion Instrument (ACI) — a set of measures aiming to shield EU member states from financial coercion — usually dubbed because the bloc’s “trade bazooka.” However, the instrument has by no means been used.

Does the US want the EU as an export market?

Yes, particularly for its vitality sector the place the US runs giant surpluses.

Liquefied pure fuel (LNG) is a main instance. Since Russia’s invasion of Ukraine in 2022, Europe has sharply elevated LNG imports from the US, with purchases having reached 81 billion cubic meters in 2025, in keeping with knowledge from the Institute for Energy Economics and Financial Analysis (IEEFA) in Cleveland, United States. As a consequence, greater than half of all US LNG exports now go to the EU.

This rising dependence cuts each methods. Any disruption would hit not solely Europe, but in addition US LNG producers and fuel firms — an trade that counts amongst Trump’s supporters.

How uncovered is US agriculture?

Soybeans illustrate one other disruption danger. The US is the world’s second-largest soybean producer after Brazil, with China and the EU amongst its largest consumers.

EU countertariffs briefly below dialogue, totaling €93 billion, included levies on soybeans. Such measures may damage US farmers and soybean exports, whereas the EU may offset losses by importing extra soy from Brazil.

Does the US depend on Europe to finance its debt?

Yes. The US carries the very best public debt on the planet. According to the US Treasury, complete federal debt stood at $38.4 trillion on January 7, of which $6.79 trillion, or 17.7%, is held by overseas collectors.

As of November 2025, Japan remained the most important overseas holder of US Treasury bonds at $1.2 trillion, adopted by the United Kingdom. Taken collectively, European collectors maintain almost half of all US debt owned overseas.

Do Trump’s tariffs weaken the greenback?

Yes. Tariffs improve inflation dangers within the US, whereas disputes over commerce coverage, finances deficits and rates of interest add to international financial and political uncertainty.

Experts anticipate the greenback’s decline towards the euro, seen final 12 months, to proceed into 2026. They anticipate additional rate of interest cuts by the US Federal Reserve, after the Fed lowered its benchmark charge from 4.25% to three.75% in 2025.

A weaker greenback is a double-edged sword. For the US, it makes exports cheaper and extra aggressive nevertheless it additionally raises import prices, fueling inflation.

For the EU, lower-priced US vitality imports assist curb inflation and cut back company vitality prices. At the identical time, a weaker greenback makes EU exports to the US costlier, undermining the competitiveness of European firms.

This article was initially written in German.