Trade in goods between the European Union and the United States reached a record €875 billion ($1.00 trillion) last year despite tariffs, according to a study by the German Economic Institute (IW). The headline figure, however, masks significant underlying economic strain, particularly for Germany’s automotive sector.
EU exports to the US rose 7.7% to €580 billion, while US exports to the EU increased 2.2% to €295 billion, pushing the EU’s goods trade surplus with the United States to nearly €285 billion, the study reported.
| Trade Flow | Value (€ billion) | Change vs previous year |
|---|---|---|
| EU exports to US | 580 | +7.7% |
| US exports to EU | 295 | +2.2% |
| EU surplus | 285 | – |
"This first impression is misleading," said IW economist Samina Sultan, highlighting that the apparent strength in trade flows was partly driven by front-loading of shipments ahead of tariff increases that came into effect in April.
German auto sector faces sharp decline
Despite overall growth, European manufacturing, especially the auto industry, faced notable pressure. EU exports of cars and automotive parts to the United States fell 20.4% in 2025, according to the study. Germany, which accounts for nearly two-thirds of EU auto exports to the US, recorded an 18.9% drop in shipments.
| Sector | Export change (EU to US) |
|---|---|
| Cars and auto parts | –20.4% |
| German auto exports | –18.9% |
The decline underscores the sector-specific impact of tariff-related disruptions even as aggregate trade numbers remain strong.
Ireland offsets regional weakness
Not all EU economies followed the downward trend. Ireland posted a 52.7% surge in exports to the US, driven largely by tariff-exempt pharmaceutical and chemical products, the study found. Other countries that recorded export growth included:
- Czech Republic (+5.1%)
- Italy (+7.2%)
- Denmark (+10.6%)
- Finland (+10.8%)
Most other EU member states saw declines in exports to the US.
Services trade also hits record levels
Transatlantic services trade also reached a record €865 billion, although the EU ran a €178 billion deficit in this segment. Intellectual property payments—covering software licences, patents and trademarks—accounted for more than 40% of EU service imports from the United States, rising 13.7%. The report noted that while services have largely escaped direct tariff impacts, the broader trade conflict has still affected flows. EU imports of US travel services fell by around 8%, a decline attributed to fewer European tourists visiting the United States last year.
The IW study also said that the Turnberry trade deal between the EU and the US has asymmetrically benefited Washington, although it remains a workable arrangement that should be maintained by both sides. "New tariff threats would cause new uncertainty that only hampers business activities on both sides of the Atlantic," the institute warned.
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