EU-U.S. trade boom leaves German carmakers behind

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EU-U.S. trade hits record

Highlights

EU-U.S. goods trade reached €875 billion last year.
EU exports to the U.S. rose 7.7% to €580 billion.
EU car and parts exports to the U.S. fell 20.4%.

Record trade, uneven gains

According to a study by the German Economic Institute, EU goods exports to the U.S. rose 7.7% to €580 billion, while U.S. goods exports to the EU increased 2.2% to €295 billion, leaving the EU with a goods trade surplus of nearly €285 billion. The figures show that transatlantic goods trade remained resilient despite tariff pressure, but the study noted that the overall increase was partly distorted by shipments made before the tariffs took effect in April, Reuters reported.

The increase was not evenly spread across Europe. Ireland recorded a 52.7% jump in exports to the United States, helped by pharmaceutical and chemical products that were exempt from tariffs. The Czech Republic, Italy, Denmark, and Finland also posted gains, but most EU member states saw their goods exports to the U.S. decline.

The contrast shows how tariff policy can reshape trade flows without necessarily reducing total trade volumes. Companies that could move goods early or rely on exempt categories were better protected. Manufacturers exposed to tariff-hit sectors faced a much harsher year.

German autos take the hit

The clearest damage appeared in the automotive sector. EU car and auto parts exports to the United States fell 20.4% in 2025, according to the IW study. Germany, which accounts for nearly two-thirds of EU auto exports to the U.S., posted an 18.9% decline.

That drop matters because autos remain one of Europe’s most important industrial exports and a core part of Germany’s manufacturing base. A record goods-trade number, therefore, does not mean the tariff conflict was harmless. It means losses in one major sector were offset by gains elsewhere, especially in pharmaceuticals and chemicals.

The Turnberry trade deal between the EU and the United States helped prevent a broader rupture, but the IW study said it benefited the U.S. asymmetrically. Still, researchers argued that both sides should honor the agreement, warning that renewed tariff threats would add uncertainty and hold back business activity on both sides of the Atlantic.

Services change the balance

Goods trade tells only part of the story. Transatlantic services trade also reached a record €865 billion, but in that category the EU ran a €178 billion deficit. Intellectual property fees, including software licenses, patents, and trademarks, made up more than 40% of EU service imports from the United States and rose 13.7%.

That makes the overall relationship more balanced than the goods figures alone suggest. The EU sells far more goods to the U.S., while the U.S. earns heavily from services, technology, and intellectual property. The record totals show the depth of transatlantic commerce, but the sector-level damage shows why tariff tensions remain politically difficult. For Europe, the risk is that new trade threats could again hit industries already under pressure, especially autos.

We also reported that the EU advances the U.S. trade deal after Trump's tariff threats.

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