Tariff tussle threatens $9.5T transatlantic trade and investment
The tariff conflict threatens transatlantic business valued at $9.5 trillion annually, warned the European branch of the American Chamber of Commerce in a report titled "The Transatlantic Economy 2025," published on Monday.
According to the Chamber, whose members include Visa, ExxonMobil, and Apple, the tariff dispute jeopardizes the world's largest trading relationship, Reuters reported. This follows the recent U.S. administration's decision to impose tariffs on steel and aluminum imports, to which the EU has responded with similar measures.
The Chamber noted that trade is only part of the transatlantic exchange, with the real focus being on investments.
Contrary to conventional wisdom, most U.S. and European investments flow to each other, rather than to lower-cost emerging markets, said Daniel Hamilton, the report's author, as quoted by Reuters.
Side effects
The side effects of the trade conflict will not be limited to trade itself. They will spread to all other areas, warned Hamilton. He believes there is a risk of the tariff war spreading to trade in services, data, or energy flow because Europe is dependent on LNG imports from the U.S.
American President Donald Trump justified the start of the tariff war based on the surplus of European goods exports to the United States. However, there is simultaneously a surplus of American services exports to the EU, reminded Reuters.
