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The European Union and the United States have the largest bilateral trade and investment relationship and enjoy the most integrated economic relationship in the world. Although overtaken by China in 2021 as the largest EU import source for goods, the US remains the EU’s largest trade and investment partner by far.
The transatlantic relationship defines the world economy. Either the EU or the US is the largest trade and investment partner of almost every other country in the global economy. Taken together, the economies of both territories amount to more than 40% of world GDP and more than 40% of global trade in goods and services.
- The EU-US trade and investment relationship remains strong despite the economic challenges related to the Covid-19 pandemic. In 2020, EU companies exported goods worth €353 billion, almost €2 billion more than in 2018. More than 164,000 EU companies export to the US, almost 93,000 of which are SMEs.
- Total US investment in the EU is three times higher than in all of Asia.
- EU investment in the US is around eight times the amount of EU investment in India and China together.
- EU and US investments are the real driver of the transatlantic relationship, contributing to growth and jobs on both sides of the Atlantic. A third of this transatlantic trade comprises intra-company transfers.
- The transatlantic relationship defines the shape of the overall global economy. For most countries, either the EU or the US is the largest trade and investment partner.
- Together, the EU and the US economies account for about half of world GDP and for nearly a third of world trade flows.
The EU and the United States
The EU and the US are each other’s biggest source of foreign direct investment. In 2019, the EU registered €2.2 trillion in outward stock, and €2.0 trillion in inward stock. EU and US investment is an important driver of the transatlantic relationship and contributes to growth and jobs on both sides of the Atlantic. A third of all transatlantic trade comprises intra-company transfers, a testimony to the deep economic integration between the EU and US markets.
Find out more about the trade and investment relationship between the EU and the US on the website of the Delegation of the European Union to the United States.
Despite the US being the EU’s largest trading partner, there is no dedicated free trade agreement between the EU and the US. The Transatlantic Trade and Investment Partnership (TTIP) negotiations were launched in 2013, but ended without conclusion at the end of 2016. They were formally closed in 2019 after being considered obsolete. Nevertheless, transatlantic trade continues to enjoy one of the lowest average tariffs (under 3%) in the world, governed by World Trade Organization (WTO) rules.
Despite the fact that trade disputes tend to grab headlines, the current disputes only affect around 2% of EU-US trade. The WTO’s dispute settlement mechanism handles some of these disputes.
The EU-US Summit of 2021 made progress towards resolving some of the longest-standing trade disputes between the two parties. At the summit, both sides:
- Took a decisive step toward resolving the Airbus-Boeing WTO dispute, by creating a Cooperative Framework for Large Civil Aircraft, and suspending related US and EU tariffs for five years.
- Confirmed their determination to work together to resolve tensions from the US application of tariffs on imports of steel and aluminium from the EU under US Section 232. Both sides agreed to work towards allowing trade to recover from its 2020 lows and ending the WTO disputes.
Dialogues and meetings
The EU and the US discuss trade and other items related to trade on a regular basis in various fora, such as at the World Trade Organization, at EU-US summits, and on an ad-hoc basis.
After the 2021 EU-US summit, the European Union and the United States released a Joint Statement announcing a renewed transatlantic partnership in the post-pandemic era. This agenda centres on global health challenges, green growth, strengthening trade relations, and fostering democratic values for a more secure world.
Trade and Technology Council
The European Union and the United States launched the EU-US Trade and Technology Council (TTC) at their summit in Brussels on 15 June 2021. The TTC serves as a forum for the EU and the US to coordinate approaches to key global trade, economic and technology issues, and to deepen transatlantic trade and economic relations based on shared democratic values.
At the TTC’s inaugural meeting in Pittsburgh on 29 September 2021, the US and the EU published a Joint Statement agreeing to deepen transatlantic cooperation to strengthen semiconductor supply chains, curb non-market trade practices, and adopt a more unified approach to regulating global technology firms, with each party respecting the other’s regulatory autonomy.
The two sides agreed to exchange information on investment trends affecting security, including industry-specific trends, origin of investments, and types of transaction. They also agreed to share best practices on analysing and addressing risk, focusing on sensitive technologies and data.
This work takes place in 10 working groups. Some groups focus on developing technology standards, advancing supply chain security, export controls, and investment screening. Other groups look at developing finance for secure and resilient digital connectivity in third-world countries, tackling arbitrary or unlawful surveillance, and promoting SMEs’ access to digital tools.
Trading with the United States
- Importing into the EU from the United States
- EU trade defence measures on imports from United States
- Exporting from the EU to the United States
- Trade relations are part of the EU's overall political and economic relations with the United States
- United States is a member of the World Trade Organization
The EU and the US have today reaffirmed their close cooperation to address global trade and technology challenges in line with their shared commitment to democracy, freedom and human rights.
As from the end of this month, trade of molluscan shellfish – such as mussels, clams, oysters and scallops – will resume between the EU and the USA.
Today, a World Trade Organization (WTO) panel report ruled that US countervailing duties applied on imports of ripe olives from Spain, put in place during the previous administration in 2018, are illegal under WTO rules.