The escalation of the trade war between the US and Europe is jeopardizing commercial relations worth approximately $9.5 trillion a year, including bilateral trade and investment, according to a report by the American Chamber of Commerce in the EU (AmCham EU). AmCham EU, which represents American companies operating in Europe, notes that the imposed import duties could negatively affect not only the volume of trade in the goods covered by them, but also harm transatlantic investments, which are much higher.
The volume of bilateral trade in goods between the US and Europe, including the UK, reached a record $1.3 trillion in 2024, and the volume of trade in services amounted to more than $750 billion, the Chamber of Commerce reported.
At the same time, according to its estimates, sales of European companies’ subsidiaries in the United States exceeded $3.5 trillion, and branches of American companies in Europe – $4 trillion.
“The damage to trade flows in goods is quite large,” said Malte Lohan, head of AmCham EU. – “The main risk is that all this will begin to affect other ties as well.
US President Donald Trump, speaking about US-European trade relations, mainly focuses on trade in goods, The Wall Street Journal reports. He has repeatedly expressed concern about the high US trade deficit with the EU, which amounted to $235.6 billion last year.
Trump has already imposed 25% duties on steel and aluminum supplies to the United States, particularly from Europe. He is also threatening to impose similar duties on imports of European cars, pharmaceuticals, and a number of other goods in response to tax and regulatory measures in Europe.
Last week, Trump also promised to impose 200% tariffs on European alcoholic beverages in response to the European Union’s decision to increase duties on imports of American whiskey to 50%. Alcohol producers in both the United States and Europe have already stated that the trade war will cause deep damage to the industry. The introduction of 200% duties will effectively close the US market to European wine producers.
The consequences of mutual threats and retaliatory measures could be even more severe, warns Dan Hamilton, a researcher at Johns Hopkins University and one of the authors of the AmCham EU report. The EU could retaliate against Washington by imposing taxes on American services, in which the United States has a trade surplus.
According to a report by the Chamber of Commerce, Europe receives more direct U.S. investment than other regions of the world combined. Meanwhile, European companies account for almost two-thirds of all direct investment in the United States.
The imposition of tariffs could make it more difficult for European companies to send components manufactured in the region to their own facilities in the United States, while retaliatory tariffs from the EU or another Washington trading partner could make it more difficult to export the final product from the United States, Hamilton said. Political uncertainty may cause companies to refrain from transatlantic investments.
“The ripple effect of the conflict in the trade sphere will not be limited to trade,” the expert emphasizes.
