US Europe tariff war on the brink: $9.5 trillion economic ties face crisis of rupture

2025-03-17 2998

On Monday (March 17), the American Chamber of Commerce for the European Union (AmCham EU) issued a warning that the US European tariff conflict is endangering $9.5 trillion worth of transatlantic business annually. Although the commercial relationship between Europe and the United States reached a record level in 2024, with trade in goods and services exceeding $2 trillion, the recent escalation of tariff conflicts may have far-reaching impacts on the economies of both sides. With Washington imposing tariffs on steel and aluminum, the European Union devising retaliatory plans, and Trump threatening a 200% tariff on EU wines and spirits, transatlantic economic relations are facing unprecedented challenges.

The Current Status and Potential of the Transatlantic Economy

The report from the European Union American Chamber of Commerce shows that the business relationship between Europe and the United States continues to deepen, with the trade volume of goods and services reaching a historical high of $2 trillion in 2024. The report emphasizes that 2025 will be a year full of hope and danger, with trade conflicts potentially disrupting the world's largest commercial relationship. The sales of American foreign affiliates in Europe are four times that of American exports to Europe, while the sales of European affiliates in the United States are three times that of European exports, demonstrating a highly interconnected economy between the two sides.

The escalation and impact of tariff conflicts

Over the past week, Washington has imposed tariffs on steel and aluminum, while the European Union has formulated retaliatory plans. President Trump even threatened to impose a 200% tariff on EU wines and spirits. The EU US Chamber of Commerce warns that the chain reaction of these tariff conflicts could harm transatlantic investment and trade. The report points out that trade is only a part of transatlantic business activities, and the real indicator is investment, with most of the investment from the United States and Europe flowing towards each other rather than low-cost emerging markets.

Potential risks and future challenges

In addition to commodity trade, service trade, data flow, and energy may also be affected by tariff conflicts. Europe relies on liquefied natural gas imports from the United States, and tariff conflicts may further affect the energy sector. The EU American Chamber of Commerce calls on both sides to resolve their differences through dialogue and avoid irreversible damage to the transatlantic economy caused by the trade war.

summarize

The escalation of the US European tariff conflict is endangering the $9.5 trillion worth of transatlantic business annually. Despite the record breaking level of US European commercial relations in 2024, the threat of a trade war could undermine this world's largest economic partnership. In the future, how to resolve differences through negotiations and avoid the chain reaction of tariff conflicts will be the key to the sustained prosperity of the transatlantic economy.

The tariff conflict has intensified the uncertainty of the US European trade relationship in the market, which may lead to investors' concerns about the economic prospects of the eurozone, thereby exerting short-term pressure on the euro.

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