Europe and America are two of the largest and most influential economic regions in the world. They have a long and complex history of trade relations, which affect their economies, societies, and politics. In this blog post, we will explore how Europe and America traded differently in 2022 and 2023, based on the latest available data from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis (BEA).

The Overall Trade Balance

The overall trade balance is the difference between the value of exports and imports of goods and services. A trade deficit occurs when imports exceed exports, while a trade surplus occurs when exports exceed imports.

According to the BEA (2023), the U.S. goods and services deficit with the European Union (EU) increased by $21.5 billion, or 10.6%, from $202.5 billion in 2022 to $224.0 billion in 2023. This increase reflected an increase in the goods deficit of $21.5 billion to $112.6 billion and a decrease in the services surplus of $0.1 billion to $27.9 billion.

The U.S. goods and services deficit with Europe as a whole (including non-EU countries) increased by $23.4 billion, or 10.8%, from $216.7 billion in 2022 to $240.1 billion in 2023. This increase reflected an increase in the goods deficit of $23.4 billion to $123.9 billion and no change in the services surplus of $36.2 billion.

The U.S. goods and services deficit with the world increased by $103.0 billion, or 12.2%, from $845.0 billion in 2021 to $948.1 billion in 2022 (BEA, 2023). This increase reflected an increase in the goods deficit of $105.9 billion to $1,087.7 billion and an increase in the services surplus of $2.9 billion to $139.6 billion.

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The Major Changes in Exports

Exports are the goods and services that are sold or transferred to foreign countries or residents.

According to the Census Bureau (2023), the U.S. exports of goods to the EU decreased by $195.4 billion, or 1.8%, from $350.8 billion in 2022 to $155.4 billion in 2023 (January-May). The major categories of exports that decreased were:

• Industrial supplies and materials: down by $7.8 billion, or 11%
• Consumer goods: down by $4.4 billion, or 9%
• Capital goods: down by $1.8 billion, or 2%

The major categories of exports that increased were:

• Foods, feeds, and beverages: up by $2.7 billion, or 14%
• Automotive vehicles, parts, and engines: up by $0.9 billion, or 4%

The U.S. exports of services to the EU increased by $5.6 billion, or 7%, from $77.4 billion in 2022 to $83.0 billion in 2023 (January-May). The major categories of services that increased were:

• Travel: up by $3.6 billion, or 29%
• Transport: up by $1.0 billion, or 10%
• Other business services: up by $0.7 billion, or 4%

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The Major Changes in Imports

Imports are the goods and services that are bought or received from foreign countries or residents.

According to the Census Bureau (2023), the U.S. imports of goods from the EU increased by $216.9 billion, or 6%, from $553.3 billion in 2022 to $236.7 billion in 2023 (January-May). The major categories of imports that increased were:

• Capital goods: up by $11.5 billion, or 11%
• Consumer goods: up by $10.8 billion, or 11%
• Automotive vehicles, parts, and engines: up by $8.5 billion, or 9%

The major categories of imports that decreased were:

• Industrial supplies and materials: down by $5.6 billion, or 7%
• Foods, feeds, and beverages: down by $0.8 billion, or 4%

The U.S. imports of services from the EU decreased by $0.5 billion, or 1%, from $150.8 billion in 2022 to $150.3 billion in 2023 (January-May). The major categories of services that decreased were:

• Transport: down by $1.0 billion, or 8%
• Travel: down by $0.4 billion, or 3%

The major categories of services that increased were:

• Other business services: up by $0.7 billion, or 3%
• Charges for the use of intellectual property: up by $0.2 billion, or 2%

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Below you'll see an overview of a few selected ports in Europe and the US and their relative changes. Note that almost all ports saw a decrease in TEU per trade lane. This can be attributed to low container ship TEU capacity and unfavorable trade relations and policies. These factors may have reduced the demand for container shipping between Northern Europe and the United States, resulting in lower cargo volumes.

Want to know what other ports did? Then check out our live dashboard, backed by daily updated customs data: https://metabase.coreties.com/public/dashboard/8008d346-0a7d-4f33-8738-cca53d51e70e#refresh=60

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The Implications and Outlook

The changes in import and export between 2022 and 2023 between Europe and America reflect the dynamics of the global economy, the impact of the pandemic, and the policies of the governments. Some of the factors that may have influenced the trade flows are:

• The recovery of the global demand and supply chains after the disruption caused by the pandemic
• The exchange rate fluctuations between the U.S. dollar and the euro
• The trade tensions and disputes between the U.S. and the EU over various issues, such as digital taxes, steel and aluminum tariffs, and aircraft subsidies
• The implementation of the new trade agreement between the U.K. and the EU after Brexit
• The progress of the negotiations for a transatlantic trade and investment partnership (TTIP) between the U.S. and the EU

The outlook for the trade relationship between Europe and America depends on how these factors evolve in the future, as well as on the potential opportunities and challenges that may arise from new developments, such as:

• The emergence of new variants of the coronavirus and the effectiveness of the vaccination campaigns
• The adoption of new technologies and innovations in various sectors, such as green energy, digital services, and biotechnology
• The cooperation or competition between the U.S. and the EU on global issues, such as climate change, human rights, and security

The trade relationship between Europe and America is likely to remain vital and dynamic, as both regions have strong economic ties, shared values, and common interests. However, it is also likely to face some uncertainties and frictions, as both regions have different priorities, perspectives, and interests. Therefore, it is important for both sides to maintain a constructive dialogue, resolve their disputes amicably, and seek mutually beneficial solutions.

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Bibliography

Census.gov. (2023). Trade in Goods with European Union. Retrieved from https://www.census.gov/foreign-trade/balance/c0003.html

U.S. Bureau of Economic Analysis (BEA). (2023). U.S. International Trade in Goods and Services, December and Annual 2022. Retrieved from https://www.bea.gov/news/2023/us-international-trade-goods-and-services-december-and-annual-2022