EU-US Goods Trade Reaches €875 Billion Despite Trade Frictions
Synopsis
Strong export growth pushed transatlantic goods trade to a record level, even as tariffs weighed on key industries such as automotive manufacturing.
Key Highlights
- EU–US goods trade reached a record €875 billion in 2025.
- EU to US exports surged 7.7% to €580 billion, and US exports to the EU grew 2.2% to €295 billion.
- The goods surplus of the EU was almost a quarter bigger, rising to close to €285bn.
A new study by Germany’s Institute of the German Economy (IW) found that trade in goods between the European Union and the United States rose to a record €875 billion ($1 trillion) in 2025 despite increased tariffs. The numbers highlight the strength of transatlantic trade but have also added to pressure on European manufacturing, especially Germany’s car sector.
The EU and U.S. are two of the world’s biggest economies. An extended trade dispute would impact global growth, commodity demand, currency markets and investor sentiment that could have repercussions for Australian exporters, the A$ and ASX-listed miners and manufacturers.
Auto industry hardest hit in Germany
According to the IW trade study, €580 billion in EU exports to the United States last year were 7.7% higher than before, and US exports to the EU increased by only 2.2% compared to €295 billion, bringing the EU foreign balance of gain at nearly €285 billion
But the report said that the figures for headline growth were also partially influenced by companies rushing forward shipments in March before new tariffs began in April.
The automotive sector of Germany was one of the biggest losers. Exports from the EU to the US of cars and auto parts fell 20.4% over that time frame, while deliveries from Germany, the source of nearly two-thirds of all automotive exports from the bloc to America, plunged 18.9%.
Ireland, meanwhile, enjoyed export growth of 52.7%, due to its pharmaceutical and chemical products that are tariff-exempt. However, Italy (+7.2%), Denmark (+10.6%), Finland (+10.8%) and the Czech Republic (+5.1%) were all among those EU member states that recorded an increase in exports.
Services Trade Achieves New Record High
Transatlantic services trade rose to a record €865 billion however, the EU was seen as a net exporter of goods with a €178 billion deficit in services.
Assets were driven by software licences, patents and trademarks, which together made up over 40% of EU service imports from the US; growth for these categories was at 13.7% over the year.
EU imports of US travel services decreased, estimated at 8%. The decrease was caused by the decline in European tourists travelling to America, despite tariffs.
The trade deal with Turnberry ultimately favoured the United States, but researchers described it as a practical agreement worth keeping. They cautioned that new threats to levy tariffs would add extra uncertainty for companies on both sides of the Atlantic.
Source: Reuters
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