EU-US trade hit record €875B in 2025, but auto exports plunged, study finds

Goods trade between the European Union and the United States reached a record €875 billion in 2025, but the headline figure conceals a sharp decline in European automotive exports to America, according to a study published Friday by the German Economic Institute (IW).reuters+1

Record Surplus Driven by Front-Loading

EU exports to the United States rose 7.7% to €580 billion, while U.S. imports into the EU climbed 2.2% to €295 billion, pushing the bloc's trade surplus to nearly €285 billion, the IW found. The growth came even as tariff pressures mounted throughout the year, with the Trump administration imposing a 25% levy on vehicle imports in April 2025 before a broader deal capped most EU tariffs at 15% later that summer.aljazeera+3

Transatlantic services trade also reached a record €865 billion, though the EU ran a €178 billion deficit in that category. Fees for intellectual property — including software licenses, patents, and trademarks — represented over 40% of EU service imports from the U.S., climbing 13.7%.indexbox+1

Auto Industry Bears the Brunt

Beneath the record totals, the automotive sector suffered. EU car and parts exports to the U.S. fell 20.4% in 2025, with Germany — responsible for nearly two-thirds of EU auto shipments to America — recording an 18.9% decline. The European Automobile Manufacturers' Association separately reported that EU vehicle exports to the U.S. fell 21.7% in value to €31 billion.acea+2

The damage accelerated after Washington imposed the initial 25% car tariff in April 2025. Exports dropped 23.5% in April and May alone before partially recovering once tariffs were reduced to 15% under the July 2025 trade deal.investmentmonitor+1

Renewed Tariff Threats Cloud Outlook

The IW warned that new tariff threats would cause uncertainty that "only hampers business activities on both sides of the Atlantic." That warning has grown more urgent since President Trump announced in early May 2026 that he would raise EU car tariffs back to 25%, accusing Brussels of failing to comply with the July 2025 agreement. The European Commission has disputed that claim, and the European Parliament has included a clause to suspend the trade deal if U.S. tariffs exceed 15%.virginiabusiness+3

Early 2026 data already shows the strain: EU exports to the U.S. fell more than 25% in both January and February, though economists at Commerzbank attributed part of the drop to the unwinding of 2024's front-loading and euro appreciation rather than tariffs alone.reuters