Trump’s bane, the EU’s trade surplus with the United States increases further

Trump's bane, the EU's trade surplus with the United States increases further

© Francois Lenoir / REUTERS
Over one year, exports from the euro area to the rest of the world increased by 2.7%, while imports increased by only 1.5%. Result.

The European Union remains a nerve center for world trade. Published this Friday, latest estimates Eurostat stress that the European trade surplus continued to strengthen in 2019. Europe sees its exports grow vis-a-vis certain countries in particular, including the United States, and this while Donald Trump does not stop to recall that it intends to act to reduce this widening gap.

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Over one year, exports from the euro area to the rest of the world increased by 2.7%, while imports increased by only 1.5%. As a result, the area’s trade surplus with the rest of the world rose to 225.7 billion euros, against 194.6 billion at the end of 2018.

The gap is even more massive across the 27 Member States: exports of goods reached 2 132.3 billion euros, up 3.5% year on year, when imports only increased by 1.3% over the same period, reaching 1,932 billion euros. In fine, the Union’s surplus climbed to 200.3 billion euros in 2019, 48.5 billion more than the previous year.

Unsurprisingly, member countries derive most of their surplus from their exports of manufactured goods (€ 423 billion in trade surplus), including chemicals and machinery or vehicles. Conversely, imports of energy raw materials significantly reduce the surplus, adding € 256.7 billion to the bill.

Not all nations are equal in trade: large disparities remain between their balance sheets. As for good students, Germany has an insolent surplus of more than 227 billion euros in 2019, followed, far behind, by the Netherlands (65.9 billion), Ireland (63.9) and Italy (52.9). Conversely, France keeps the highest deficit, around 73.1 billion euros, and remains at the bottom of the pack behind Spain (-34.2), Greece (-21, 7), Portugal (-20.4) and Romania (-17.6).

A conflicting subject between Washington and BrusselsThe balance sheet for 2019 also highlights the considerable advantage that the European Union derives from its trade with the United States. Indeed, if certain nations such as China, Russia, Japan, Norway or South Korea export more to the Union than the reverse, the United States represents the first trade surplus of the 27, by far, before the United Kingdom. In total, the European bloc drew a surplus of 152.6 billion euros from its trade across the Atlantic, up by nearly 15 billion (or 11%) over a year. Conversely, the deficit with Moscow has narrowed, as has the deficit with Oslo.

These data are not trivial: the American trade deficit continues to be criticized by the occupant of the White House, who denounces practices ‘Unfair’ European for several years. The Member States of the Union “Treat the United States very badly commercially”complained Donald Trump on Twitter in March 2018. More recently, he lamented again “The huge deficit” with Brussels, caused, according to him, by the “Incredible customs barriers” put in place by the Union. Now engaged in the campaign for his re-election, he has repeatedly promised to act to end these “$ 150 billion” lost every year.

Last December, shortly before the signing of an agreement of “Phase 1” with China, the American President had estimated that it was time to negotiate “Very seriously” a commercial treaty with Brussels. For the time being, however, discussions are slipping, despite the optimism displayed by Commission President Ursula Von der Leyen. If negotiations fail, the customs weapon has already been brandished by Trump: “It is more difficult to negotiate with the European Union than with anyone. They have enjoyed our country for so many years “, had he commented during an interview with Fox News. “In the end it will be very simple because if we cannot make a trade agreement (with the EU), we will have to put a 25% tax on their cars”, he then warned. A threat taken particularly seriously in Germany.

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