US-EU tariff clash imperils $9.5 trillion of business, AmCham warns
The ongoing U.S.-European tariff conflict is endangering an estimated $9.5 trillion in annual business activity, according to a warning from the American Chamber of Commerce to the EU (AmCham EU). The organization’s latest report highlights the growing importance of transatlantic trade, which reached a record $2 trillion in goods and services in 2024. AmCham EU, representing over 160 major companies such as Apple, ExxonMobil, and Visa, emphasized that while trade is vital, investment flows between the U.S. and EU are even more critical to their economic relationship.
Despite the strength of this commercial relationship, recent actions from both sides have escalated tensions. The U.S. imposed tariffs on steel and aluminum, and President Donald Trump has threatened to impose tariffs as high as 200% on EU wine and spirits. Trump’s push against the U.S. goods trade deficit with the EU, coupled with his emphasis on reshoring production to the U.S., has further strained relations.
AmCham’s report underscores that the transatlantic business ecosystem goes beyond trade to include significant levels of direct investment. U.S. sales through foreign affiliates in Europe surpass four times the value of exports to the region, while European affiliate sales in the U.S. are three times higher than exports from Europe. This interconnectedness could be severely affected if tariff disputes spill over into other sectors, such as services, data flows, and energy, with Europe heavily reliant on U.S. liquefied natural gas (LNG).
Daniel Hamilton, the report’s lead author, warned that the ripple effects of a deepening trade conflict could disrupt vital intra-firm trade, which constitutes a large portion of trade in countries like Ireland and Germany. This could lead to inefficiencies in global value chains, potentially hurting competitiveness. Both U.S. and European companies rely on these interlinked supply chains, such as BMW’s exports from the U.S., making the economic fallout of the dispute far-reaching and complex.
SOURCE: REUTERS