**Brussels**: The American Chamber of Commerce in the EU warns that ongoing tariffs imposed by the US threaten the $9.5 trillion transatlantic business landscape, highlighting rising tensions and potential economic fallout as both sides navigate intricate trade relationships and retaliatory measures ahead of a pivotal year in 2025.
The ongoing conflict between the United States and Europe concerning tariffs poses a significant threat to the transatlantic business landscape, valued at approximately $9.5 trillion annually. This alarming assertion comes from the American Chamber of Commerce in the EU (AmCham EU), as outlined in a report referenced by Reuters. AmCham EU, which represents over 160 organisations, has indicated that trade relations across the Atlantic have strengthened, reaching record levels of $2 trillion in goods and services trade by 2024.
However, the report has designated 2025 as a pivotal year fraught with both opportunities and challenges for the world’s foremost trade relationship. This warning coincides with recent developments, including Washington’s imposition of tariffs on steel and aluminium, which has prompted the EU to formulate retaliatory strategies. President Donald Trump has additionally escalated tensions by threatening to implement tariffs as high as 200% on wine and spirits imported from the European Union.
Trump’s administration is focused on addressing what it perceives as a trade deficit in goods with the EU, despite the fact that the US enjoys a surplus in services. In an effort to bolster the US economy, Trump has urged manufacturers to shift production back to American soil.
AmCham emphasizes that the intricacies of trade extend beyond mere exchanges of goods. The report highlights that investments serve as more relevant indicators of transatlantic economic interactions, noting, “Contrary to popular belief, most American and European investments are directed toward each other, not toward cheaper emerging markets.” In fact, the sales generated by US foreign affiliates in Europe dwarf US exports to the continent, being four times greater. Conversely, sales from European affiliates in the US are three times higher than European exports.
The report indicates that the repercussions of the evolving trade conflict between the US and the EU could jeopardise these established and interdependent relationships. There is a growing concern that this trade war may expand beyond tariffs on goods to encompass services, data flows, or energy supplies. This is particularly pertinent given that Europe has a substantial reliance on liquefied natural gas imports from the United States.
Moreover, the interconnectedness of American and European companies is underscored by their shared value chains, which enable them to remain competitive on a global scale. A notable example includes vehicles manufactured by the German firm BMW, which are exported from the US.
As these developments unfold, stakeholders on both sides of the Atlantic continue to navigate the complexities of trade relations amidst rising tensions and the potential for further economic fallout.
Source: Noah Wire Services
Subscribe to Industry Updates
