**Brussels**: A new report from the American Chamber of Commerce in the EU warns of vulnerabilities in transatlantic trade relations amidst escalating tariffs, emphasising the importance of investments and the potential for significant impacts across various sectors as conflicts evolve.
A recent warning from the American Chamber of Commerce in the EU (AmCham EU) has underscored the vulnerabilities in transatlantic trade relations, particularly amid escalating tariff disputes between the United States and Europe. The report, released on Monday, highlights a critical juncture for the $9.5 trillion annually traded between the two regions, pointing to both promises and risks as 2025 approaches.
AmCham EU, which represents over 160 members, including major corporations such as Apple, ExxonMobil, and Visa, noted that trade in goods and services between the U.S. and Europe reached an unprecedented $2 trillion in 2024. This figure marks a significant deepening of economic ties, though AmCham cautions that these relationships could be jeopardised by ongoing trade conflicts.
In recent developments, the U.S. government has imposed tariffs on steel and aluminium imports, prompting the European Union to devise retaliatory measures. President Donald Trump has also signalled his intention to impose substantial tariffs—up to 200%—on EU wine and spirits as part of efforts to address the U.S. trade deficit in goods with Europe. While Trump has focused on encouraging U.S. manufacturing, the reality presents a more complex picture, as services trade currently shows a surplus for the U.S.
The AmCham report posits that the true measure of transatlantic commerce extends beyond trade figures, emphasising the importance of investments. The report asserts that most U.S. and European investments are directed towards each other, rather than emerging markets characterised by lower costs. According to their findings, sales from U.S. foreign subsidiaries in Europe are approximately four times greater than U.S. exports to Europe, while sales of European subsidiaries in the U.S. are three times the volume of European exports.
Lead researcher Daniel Hamilton cautioned that the ongoing trade conflict poses significant risks to these established business relationships. He noted that intrafirm trade—central to many European economies like Ireland (accounting for about 90% of trade) and Germany (60% of trade)—could suffer from the fallout of increased tariffs and political tensions.
Hamilton also highlighted potential spillover effects on related sectors, including services trade and energy. Europe’s reliance on U.S. liquefied natural gas imports places additional stakes in the stability of these trade relations. “The secondary effects of conflicts will not be confined to trade. They cut across all these other channels, and the interactions are quite significant,” he explained.
Moreover, the report emphasises the significance of intertwining value chains among U.S. and European firms, essential for maintaining global competitiveness. For example, the production and export of BMW vehicles from the U.S. illustrate this interconnectedness. Hamilton remarked, “I’m not sure you will have isolated investments. This will simply make things very inefficient.”
As the situation develops, the implications of this trade discourse will continue to unfold, affecting numerous sectors across the transatlantic economy. The AmCham EU report serves as a crucial indicator of the potential shifts on the horizon as both sides navigate these complex commercial waters.
Source: Noah Wire Services
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