Transatlantic trade at a crossroads

Despite these tensions, the exchange of goods between the EU and the US climbed to an all-time high of 875 billion euros, with exports of the EU to the US amounting to 580 billion euros, a rise of 7.7 percent, while imports from the US to the EU stood at 295 billion euros, up 2.2 percent (according to balance of payments statistics). The resulting EU goods trade surplus with the US approached 285 billion euros, a new high. Moreover, transatlantic trade in services surpassed 865 billion euros – likewise a record. At first glance, the record-level data might suggest that tariffs and political friction have left the underlying economic relationship largely unaffected – or have even inadvertently intensified it. This first impression, however, is misleading. This Report analyses the transatlantic trade relations in greater detail and reveals how much the US-tariffs distorted trade flows with the EU last year.

Some of the main results for transatlantic goods trade are:

• On the export side, the majority of EU countries recorded a decline in shipments to the United States in 2025. The contraction was most severe in Malta, where exports fell by 40.5 percent. Austria and Cyprus each saw their exports decline by more than one fifth, while Estonia and Slovakia recorded decreases approaching that threshold.
• An increase in goods exports to the United States was recorded in only five member states: Czechia (+5.1 percent), Italy (+7.2 percent), Denmark (+10.6 percent), Finland (+10.8 percent), and – most strikingly – Ireland, whose exports to the US surged by 52.7 percent.
• Ireland's exceptional export performance reflects the disproportionate expansion of pharmaceutical transatlantic trade that has driven aggregate EU export growth to the US while obscuring the deterioration across much of the remaining goods export base.

Turning to the sectoral analysis of transatlantic trade in goods, the following results stand out:

• Due to frontloading and tariff exemptions for most pharmaceuticals and some organic chemicals in 2025, the EU's chemical and pharmaceutical industry recorded an export increase to the US of 53.7 percent in aggregate. Irish exports in this sector alone expanded by 130.4 percent. Given that Ireland accounted for 69.5 percent of total EU pharmaceutical and chemical exports to the United States in 2025, the development of Irish exports to the US determined the headline EU figure.
• Turning to transatlantic machinery trade, differences across member states were somewhat less pronounced, though still considerable. EU exports of machinery to the United States as a whole remained essentially flat. Germany is the EU's largest machinery exporter, with a share of 33.8 percent in total EU machinery exports to the US in 2025. Its exports to the United States fell by 6.4 percent in 2025. Italy, the second biggest machinery exporter with a share of 12.7 percent, recorded a more modest decline of 1.7 percent. But these declines were partly offset by higher machinery exports to the US from Hungary, France, and the Netherlands.

The consequences of the trade conflict have been particularly substantial for transatlantic automotive trade. Total EU exports of automotive products to the United States declined by 20.4 percent in 2025. This contraction was driven primarily by the German automotive industry, which alone accounted for 64.9 percent of total EU automotive exports to the United States in 2025 and recorded a decline of 18.9 percent.

While the focus of the current transatlantic trade tensions is on trade in goods, the total value of transatlantic service trade in 2025 almost reached the total value of trade in goods across the Atlantic (in balance of payments statistics). Importantly, the EU had a service trade deficit of 178 billion euros with the US in 2025. This contrasts with the EU’s trade surplus in goods trade of around 285 billion euros in 2025. The transatlantic trade relationship is therefore much more balanced, when considering both goods and service trade.

Though not directly affected by US tariffs so far, transatlantic service trade was also marred by the wider trade conflict last year. For instance:

• Trade in transatlantic transport services declined significantly in 2025. For instance, exports of EU transport services declined by more than 13 percent. This is likely to be a side-effect of the reduced transatlantic goods trade.
• For travel services, EU imports from the US declined by around 8 percent. This decline is likely to also reflect the decrease in EU tourists to the US last year.
• Charges for the use of intellectual property, which includes among others trademark rights or licenses for computer software and patents, made up more than 40 percent of total EU service imports from the US. Last year they increased by 13.7 percent. EU exports of intellectual property to the US also rose by 9.3 percent. The mutual transatlantic dependence in this service sector is particularly high. This should be taken into account in the event of a possible escalation of the current trade conflict to include trade in services, for example with regard to access to services provided by US tech companies.

This Report traced the disruptions to transatlantic goods and service trade against the backdrop of the geopolitical tensions and the introduction of trade barriers by the US administration. While transatlantic trade suffered last year, it is still strong and the EU and the US remain tightly integrated. Any trade conflict therefore hurts both sides.

Even though the Turnberry deal between the EU and the US asymmetrically benefits the US, it is a workable solution that should be honored by both sides. In that case it can substantially reduce uncertainty. New tariff threats would, however, cause new uncertainty that only hampers business activities on both sides of the Atlantic.