US President Donald Trump referred to the European Union as “nastier than China” during a news conference in Washington. His comments focused on US-EU trade relations, which involve nearly US$1 trillion in annual trade.

Trump expressed concerns about trade imbalances and suggested that Europeans should take on more financial responsibility in healthcare.

Trump claimed the US exports no cars to Europe, while the EU sends 13 million cars annually to the US.

However, data from the European Automobile Manufacturers Association shows that about 750,000 cars were exported from the EU to the US in 2024, compared to 170,000 cars exported from the US to Europe.

In response to trade negotiations, the EU has started a public review of potential tariffs on US goods worth US$100 billion.

Decisions on the tariffs will be made after a month-long review and further political discussions.

🔗 Source: Axios

🧠 Food for thought

1️⃣ The US-EU trade relationship is much larger than US-China trade, raising the economic stakes

Trump’s comparison of the EU to China overlooks the massive scale of transatlantic commerce. The US-EU relationship represents the world’s largest bilateral trading partnership, with $575 billion in US exports to the EU and $454 billion in EU exports to the US in 2018 alone 1.

US companies export more than twice as much to the EU as they do to China, making the consequences of a trade war potentially more damaging to the American economy.

The automobile industry exemplifies this complex relationship. For example, approximately 170,000 cars were exported from the US to Europe in recent years, though this is significantly lower than the 750,000 cars exported from the EU to the US 1.

This trade relationship accounts for nearly half of global GDP and approximately one-third of world trade, which is why economists view transatlantic tensions with particular concern 2.

2️⃣ Current tariff proposals would create the highest trade barriers in over a century

The escalating trade tensions would push average US tariff rates to 22.5%, the highest level since 1909, representing a dramatic shift from decades of trade liberalization 3.

These tariffs are projected to increase consumer prices by 2.3%, translating to approximately $3,800 in additional costs per American household, with lower-income households being disproportionately affected 3.