Wed, 26 Feb 2020

As world leaders from the Group of Seven (G7) countries gather over the weekend at the posh Basque beach town of Biarritz on France's Atlantic Coast, trade between the economic giants on either side of the ocean is in full view.

Commercial ties between the United States and the European Union run deep, although trade disputes have recently taken a turn for the worse. Both prosperous partners appear intent on gaining an advantage when it comes to a variety of contentious areas.

But the overall figures are important in understanding what the two sides have to lose, and why transatlantic interdependence is the linchpin of global economic stability.

In 2018, the total trade in goods and services between the US and EU was almost $1.3trn. But the US runs a trade deficit with the EU, meaning that the value of US exports to Europe ($575bn) was less than the value of the European imports to the US ($684bn).

As far as the US is concerned, the negative trade imbalance arises from lopsided trade in goods, since the US actually runs a services-trade surplus with the EU.

Total goods trade was $807bn last year, but there was a $169bn difference between the goods sent to the EU ($319bn) and the goods brought to the US ($488bn).

However, the US services-trade surplus was $60bn, as Europe purchased $256bn worth of services, while the US imported just $196bn.

Meanwhile, according to the US Department of Commerce, exports to the EU of goods and services support an estimated 2.6 million US jobs.

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US agricultural exports to the EU totaled $13.5bn, and EU countries constitute the third-biggest agricultural market for the US. The top categories of agricultural goods were soya beans and tree nuts, followed by wine and beer and then processed food.

The value of US services exported to the EU increased by 5.1% last year, and the top sector was professional and management services, followed by intellectual property and travel (which includes education).

EU imports to the US

In 2018, the EU was the second-biggest supplier of imports to the US, accounting for almost one-fifth of all US imports. The value of the goods imported increased 12.3% from the prior year.

The top US import countries in the EU were Germany ($125.9bn), UK ($60.8bn), Italy ($54.7bn), France ($52.5bn) and the Netherlands ($24.6bn).

Top categories were machinery ($80.2bn), pharmaceuticals ($71.9bn), vehicles ($56.4bn), optical/medical instruments ($32.3bn) and electrical machinery ($28.1bn).

US agricultural imports from the EU were worth $23.9bn in 2018, and EU countries ranked second - behind Mexico - as an agricultural supplier.

The biggest categories were wine and beer ($6.4bn), essential oils ($3.2bn), snack foods/chocolate ($1.7bn), vegetable oils ($1.4bn) and processed fruits and vegetables ($1.3bn).

US imports of EU services in 2018 went up just 2.1% over the previous year, and top sectors were travel, transport and intellectual property.

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