FACT CHECK: Is Europe The US’s Largest Trading Partner?
France’s Finance Minister, Bruno Le Maire, said Thursday that Europe is the largest trading partner of the U.S.
Trade between the U.S. and the European Union (EU) totaled nearly $1.2 trillion in 2017, more than any other country or region. China was the U.S.’s next largest trading partner, with trade worth $711 billion in 2017.
President Donald Trump’s administration announced Thursday that the U.S. would impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from Canada, Mexico and the EU after the U.S. initially exempted these trading partners from the tariffs in March.
Canadian Prime Minister Justin Trudeau, German Chancellor Angela Merkel and other leaders in affected countries criticized the decision and warned that they would retaliate. “It’s entirely up to U.S. authorities whether they want to enter into a trade conflict with their biggest partner, Europe,” Le Maire said after a meeting with U.S. Commerce Secretary Wilbur Ross.
The U.S. trades more with the EU than with any other country or region. Data from the Bureau of Economic Analysis (BEA) shows that the total value of imports and exports of goods and services with the EU was about $1.2 trillion in 2017. China was the next largest trading partner at $711 billion, followed by Canada at $681 billion and Mexico at $623 billion. (RELATED: Does The US Have A Trade Deficit With Canada?)
Top trading partners are determined by ranking the combined value of imports and exports with different countries and trading areas. That includes trade in goods, physical items like clothes and food, and services, intangible products like transportation and licenses. The U.S. and EU traded $722 billion in goods and $428 billion in services.
The Census Bureau ranks the U.S.’s top trading partners – but it only calculates trade in physical goods, not services, and only ranks countries, not regions or common customs areas like the EU. By that measure, China is the U.S.’s top trading partner, followed by Canada and Mexico.
Additional Census figures show that trade in goods with the EU was more than with China, however: $718 billion compared to $636 billion. (Census figures are slightly different than BEA figures because of differences in accounting methods, but the differences do not affect each country’s ranking.)
Though the EU is made up of 28 member countries, U.S. tariffs on imports from the EU generally apply to all of the EU as one bloc, and the EU imposes common tariffs on imports from non-EU Customs Union countries. EU countries agree to a “single market” of free movement of goods, capital, services and people. Individual countries in the EU cannot set their own tariffs. Products that are imported into the EU can move among EU countries without additional tariffs or customs checks.
Some EU countries trade with the U.S. more than others. In 2017, $238 billion worth of goods and services moved between the U.S. and Germany, $233 billion moved between the U.S. and the U.K. (which hasn’t yet left the EU) and $120 billion moved between the U.S. and France, according to the BEA.
The U.S. imposed tariffs on imported steel and aluminum after Commerce Department reports released in February said that unfair steel and aluminum practices threaten national security. Trump announced tariffs in March, but many countries were exempted.
Public officials and trade organizations primarily accused China of dumping steel and aluminum – subsiding production in order to flood the market and sell the commodities at artificially low prices to cripple competition. (RELATED: What Does Your Beer Can Have To Do With National Security?)
EU Commissioner for Trade Cecilia Malmstrom said Friday that U.S. tariffs are illegal and that the EU would challenge them at the World Trade Organization. The EU plans to impose countermeasure tariffs on U.S. imports. In March, the EU threatened to impose tariffs on more than 100 U.S. goods worth $3.5 billion, including motorcycles, bourbon and cosmetics.
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