The economic relationship between the United States and the European Union (EU) is complex and characterized by a significant trade deficit on the part of the US, which stood at $235.6 billion in 2024.
This trade gap has drawn the attention of US policymakers, including former President Donald Trump, who sought to reduce this deficit.
To address the imbalance, the US government imposed a 20 percent tariff on EU imports on April 2, 2024, aiming to curb European exports and bolster domestic production.
In response, the EU retaliated by enacting tariffs on $23.8 billion worth of US goods, a move officials described as “unjustified and damaging.”
Trade between the US and EU reached nearly $1 trillion in 2024, making the EU the United States’ largest trading partner bloc.
The US exported roughly $370.2 billion worth of goods to the EU during that year, with mineral fuels leading the pack at $78.9 billion, accounting for 21.3 percent of total exports.
Other significant exports included pharmaceutical products at $39.4 billion (10.6 percent), machinery at $36.6 billion (9.9 percent), and aircraft and spacecraft at $35.1 billion (9.5 percent).
In contrast, US imports from the EU totaled $605.8 billion, with pharmaceutical products again taking the lead, reaching $127 billion and making up 21 percent of total imports.
Mechanical appliances were another significant import, totaling $89.8 billion (14.8 percent), followed by cars and other non-railway vehicles (10 percent) and electrical equipment, totaling $39.3 billion (6.5 percent).
Analyzing trade flows at the state level reveals intriguing patterns of import and export behavior across the United States.
Indiana emerged as the top state in terms of imports from the EU, purchasing $49.3 billion worth of goods in 2024, followed by New Jersey with $40.9 billion and North Carolina at $39.6 billion.
On the export side, Texas led all states, selling $81.5 billion worth of goods to the EU, trailed by California at $28 billion and Louisiana at $20.8 billion.
Aerospace products and parts represented a dominant export from the US to the EU, with 15 different states reporting it as their primary export category.
These states included Arizona, Arkansas, Connecticut, Florida, Georgia, Hawaii, Kansas, Kentucky, Maine, Maryland, New Hampshire, New Mexico, Ohio, Oklahoma, and Washington.
The exports primarily consist of Boeing commercial aircraft and Lockheed Martin F-16 fighter jets.
On the import side, pharmaceuticals and medicines were the leading import for 11 different states, including Delaware, Georgia, Illinois, Indiana, Kentucky, Missouri, North Carolina, Ohio, Pennsylvania, Tennessee, and Wisconsin.
Meanwhile, motor vehicles and vehicle parts ranked as the second most significant import category for eight states: Alabama, California, Maryland, Michigan, New Jersey, Rhode Island, South Carolina, and Texas.
The European Automobile Manufacturers’ Association (ACEA) highlighted that the US remained the second-largest market for EU vehicle exports, capturing 22 percent of the EU’s vehicle export market in 2024.
Notably, the Center for Automotive Research indicated that the Detroit Three automakers—General Motors, Ford, and Stellantis (formerly Chrysler)—would face substantial increased costs due to tariffs; the average cost of the tariff per imported vehicle part was pegged at $4,911, greater than the industry’s overall average of $4,239.
In summary, the trade relationship between the US and EU is defined by a substantial deficit, ongoing tariff disputes, and a complex web of export and import activities involving various key industries across both regions.
As both sides navigate the implications of tariffs and trade balances, the dynamics of this international trade partnership will remain a focal point for economic policy discussions.
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