EU-US trade exceeded €1.2 trillion in 2022, driven by energy, chemicals, pharmaceuticals, and resilient transatlantic demand despite ongoing trade tensions.
Despite ongoing geopolitical tensions and tariff disputes, trade between the European Union (EU) and the United States (US) reached a record high in 2022. A study by the Bertelsmann Foundation and the Federation of German Industries (BDI) revealed that total trade in goods and services surpassed €1.2 trillion ($1.3 trillion) during the year. This significant increase highlights the resilience and deepening of transatlantic economic ties.
Several factors contributed to this surge in trade. Russia's war in Ukraine prompted a significant shift in energy supply chains, with the US increasingly replacing Russia as a primary energy provider to Europe. This led to a substantial rise in US energy exports, particularly liquefied natural gas (LNG), to the EU. Additionally, robust demand for both goods and services on both sides of the Atlantic fueled the growth. Efforts towards "friend-shoring," which involves diversifying supply chains to politically aligned countries, also played a role in strengthening trade relations.
Trade in goods between the EU and the US increased by 13 percent, while services trade saw an even more substantial rise of 28 percent in 2022. EU exports to the US grew by 17 percent, reaching €584 billion, and US exports to the EU climbed 24 percent, totaling €640 billion. Certain sectors experienced particularly strong growth. Pharmaceutical exports rose by 33 percent, machinery by 16 percent, and chemicals by 19 percent.
Despite the overall positive trade figures, significant tensions persist. The US Inflation Reduction Act (IRA), enacted in August 2022, has been a major point of contention, causing anger in Brussels. The EU fears the IRA's subsidies and "Buy American" provisions could lead to unfair competition and protectionist measures, potentially disadvantaging European industries and investments in green technologies. Furthermore, tariffs on steel and aluminum, initially imposed during the Trump administration, remain a source of disagreement between the two economic blocs.
The study underscores the critical need for closer cooperation to manage existing disputes and prevent further trade conflicts. Experts advocate for ongoing dialogue to address concerns, particularly regarding the Inflation Reduction Act, to avoid a potential trade war. Proposals for initiatives like a "critical raw materials club" also aim to foster collaboration and secure essential resources for both economies. Maintaining strong transatlantic economic ties is considered crucial for global stability and prosperity.
Impact on Products and ChemAnalyst Chemical Commodity Prices
The record growth in EU-US trade is expected to positively influence demand across multiple chemical value chains, particularly petrochemicals, specialty chemicals, industrial gases, and pharmaceutical intermediates. Higher exports of chemicals, machinery, and pharmaceuticals indicate stronger industrial activity, supporting consumption of key feedstocks and downstream chemical products. Increased US LNG exports to Europe also improve energy security, helping stabilize production costs for European chemical manufacturers. For commodities tracked by ChemAnalyst, products such as Ethylene, Propylene, Benzene, Toluene, Methanol, Ammonia, Urea, Caustic Soda, Acetic Acid, Vinyl Acetate Monomer (VAM), Styrene, Polyethylene (HDPE, LDPE, LLDPE), Polypropylene (PP), PVC, and engineering plastics could witness firm demand, supporting stable to moderately bullish price trends. However, ongoing disputes surrounding the US Inflation Reduction Act and remaining steel and aluminum tariffs may create periodic market uncertainty, limiting aggressive price increases. Overall, the strengthening transatlantic trade relationship is likely to support balanced demand growth and improve market sentiment across global chemical supply chains.
