The transatlantic business of $9.5 trillion annually is being put at risk by the escalating tariff conflict between the United States and the European Union as of Monday, according to the American Chamber of Commerce to the EU, AmCham EU.
AmCham EU highlighted that trade in goods and services between the two economic giants had reached $2 trillion in 2024 in its annual Transatlantic Economy report. However, the trade dispute continues to rage, and 2025 looks like it will be a year of both opportunity and risk, a record-breaking relationship.
The tensions rose to the boiling point as Washington imposed tariffs on steel and aluminum, which prompted the EU to consider retaliatory measures. Former U.S. President Donald Trump has escalated the situation further by threatening 200% tariffs on European wine and spirits, claiming that the U.S. trade deficit with the EU needs to be addressed.
AmCham EU stressed that investment, not trade, is the most important component of the transatlantic economic relationship. Surprisingly, contrary to popular belief, most U.S. and European investments are not going to emerging markets but to each other. The report pointed out that foreign affiliate sales of the U.S. in Europe are four times higher than the exports of the United States to the region, and European affiliate sales in the U.S. are three times the value of European exports.
The effects of the trade dispute could be damaging to deeply interwoven economic ties, warned Daniel Hamilton, the report’s lead author. Intra-firm trade, which includes exports, is a significant portion of their exports, and Ireland and Germany could be hit hard. Furthermore, the source continued, the conflict could expand to other sectors, like services, data flows, and energy.
