Trade between the European Union and the United States soared to a record €875 billion ($1.00 trillion) last year, defying trade barriers. However, a recent study underscores the notable economic damage hidden beneath these figures, particularly impacting Germany’s automotive industry.
The German Economic Institute (IW) report reveals a 7.7% increase in EU exports to the U.S., totaling €580 billion, while imports from the U.S. grew by 2.2% to €295 billion. Germany, heavily reliant on auto exports, faced a significant 18.9% decline in exports to the U.S., contributing to a 20.4% overall drop in EU car and parts exports. In contrast, Ireland experienced a 52.7% increase due to tariff-free pharmaceutical and chemical product exports.
Meanwhile, despite a record €865 billion in transatlantic services trade, the EU sustained a €178 billion deficit in this sector. Intellectual property fees, including software licenses and patents, made up over 40% of EU’s service imports from the U.S., highlighting the complexities of the transatlantic trade relationship. The ongoing trade conflict has negatively impacted the EU imports of U.S. travel services by around 8%, suggestively linked to fewer European tourists visiting the U.S. last year.
(With inputs from agencies.)