Blog Post

Which sectors would be most vulnerable to EU-US trade war?

As the US administration imposes new tariffs on steel and aluminium and considers further protectionist measures, we look at bilateral trade flows between the US and the EU28 across different types of products.

By: Date: March 15, 2018 Topic: Global Economics & Governance

In light of the introduction of trade tariffs on steel and aluminium in the US, and the subsequent possibility of trade war between the EU and US, it is useful to identify the potential points of future contention.

The bubble chart below compares bilateral trade flows across the ten Standard International Trade Classification (SITC) macro categories of products. Bubbles are clustered by product, and their size is proportional to the value of the flow. Data are based on Eurostat Comext and refer to 2016.

The EU28 runs a surplus in most product categories, with the exception of mineral fuels, crude materials and commodities not elsewhere specified (n.e.s.), and in particular for products in which the US and the EU28 trade intensively, like machinery and transport equipment (+€50.8 billion) and chemicals (+€29.3 billion).

Looking more in detail, the 10 most traded two-digit SITC products account for more than two thirds of all imports and exports between the US and the EU28. The two tables below summarise this information. With the exception of petroleum and related products (imported from the US) and specialised machinery (exported to the US), the same products are involved and it is interesting to look at major differences.

In general, the EU28 tends to export systematically more than it imports, especially in the case of road vehicles (+€36.5 billion), driven by massive EU28 exports of passenger cars to the US (+€30.4 billion), and of medicinal and pharmaceutical products (+€16.6 billion). On the other hand, the US exports more than it imports from the EU in the case of other transport equipment (-8.5 billion), mainly due to trade in aircraft, spacecraft, and associated equipment (-12.7 billion), as well as for power-generating machinery and equipment (-6.5 billion).

Particularly relevant may also be the trade in general industrial machinery and equipment, as well as in organic chemicals, because the EU28 exports to the US more than two times what it imports in those categories.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

View comments
Read article More on this topic More by this author

Opinion

Europe can take a bigger role in providing public goods

The EU should invest where it can deliver more value than member states acting alone.

By: Jean Pisani-Ferry Topic: European Macroeconomics & Governance Date: December 5, 2019
Read article Download PDF More on this topic

External Publication

Manufacturing employment, international trade, and China

The decline in manufacturing employment is often seen as a major reason for rising inequality, social tensions, and the slump of entire communities. With the rise of national populists and protectionists in recent years, the issue has become even more prominent.

By: Uri Dadush and Abdelaziz Ait Ali Topic: Global Economics & Governance Date: November 28, 2019
Read article More by this author

Blog Post

Bank regulation in the European Union neighbourhood: limits of the ‘Brussels effect’

The EU model of financial market regulation is increasingly copied by third countries. In this context, the EU’s efforts to promote its model beyond its borders should take into account the underdevelopment of financial markets in many partner countries, and the often insufficient capacity of regulators and supervisors.

By: Alexander Lehmann Topic: European Macroeconomics & Governance, Finance & Financial Regulation Date: November 20, 2019
Read about event More on this topic

Past Event

Past Event

Better governance, better economies

This event will feature the presentation of the 2019 EBRD Transition report, which focuses on governance in the EBRD regions.

Speakers: Daniel Daianu, Beata Javorcik, Zsuzsanna Lonti and Guntram B. Wolff Topic: European Macroeconomics & Governance Location: Press Club Brussels Europe, Rue Froissart 95, 1000 Brussels Date: November 20, 2019
Read article Download PDF More on this topic

Working Paper

The state of China-European Union economic relations

More can be done to capture the untapped trade and investment opportunities that exist between China and the EU. China’s size and dynamism, and its recent shift from an export-led to a domestic demand-led growth model, mean that these opportunities are likely to grow with time.

By: Uri Dadush, Marta Domínguez-Jiménez and Tianlang Gao Topic: Global Economics & Governance Date: November 20, 2019
Read about event More on this topic

Past Event

Past Event

The role of China in global value chains

This event looked at how the rise of China is affecting global value chains.

Speakers: Alicia García-Herrero, Seamus Grimes, Margit Molnar and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: November 18, 2019
Read article More on this topic More by this author

Podcast

Podcast

Cars, steel and national security: The EU-US trade spat

Guntram Wolff is joined by Alan Beattie, the author of the FT's new Trade Secrets newsletter, and by Andre Sapir, Bruegel's very own trade expert to discuss President Trump's tariffs and whether or not they're working

By: The Sound of Economics Topic: Global Economics & Governance Date: November 14, 2019
Read article More on this topic More by this author

Opinion

Why investors should temper optimism over a China trade rally

The economy is in worse shape than in 2015 and policies to boost growth are not as effective as they once were

By: Alicia García-Herrero Topic: Global Economics & Governance Date: November 6, 2019
Read article More on this topic

Blog Post

China’s growing presence on the Russian market and what it means for the European Union

The European Union’s relationship with Russia is strained, but the two economies are nevertheless highly intertwined. A huge share of Russia’s exports go to the EU, while in the early 2000s, EU countries supplied more than half of Russia’s imports. The EU is also a major investor in, and lender to, Russia.

By: Alicia García-Herrero and Jianwei Xu Topic: Global Economics & Governance Date: November 6, 2019
Read about event More on this topic

Past Event

Past Event

Bank resolution: consistency and predictability

Closed-door workshop on various aspects of bank resolution.

Speakers: Rebecca Christie, Jon Cunliffe, Martin J. Gruenberg, Elke König, Pamela Lintner, Martin Merlin, Maria Velentza, Nicolas Véron and Guntram B. Wolff Topic: Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: October 29, 2019
Read article More on this topic More by this author

Blog Post

A Fear of Regime Change is Slowing the Global Economy

Why did such a sharp and steady slowdown occur against a background of loose monetary policy, supportive fiscal policy, low inflation and absence of evident large imbalances? As argued in the IMF’s World Economic Outlook report issued last week, the evidence points to uncertainty over trade tensions as a major contributor.

By: Uri Dadush Topic: Global Economics & Governance Date: October 25, 2019
Read article More by this author

Podcast

Podcast

How to Spend it

Can governments make their fiscal policy go further? And are they trusted enough to try? This week The Sound of Economics asks if the quality of public spending is as important as the quantity.

By: The Sound of Economics Topic: European Macroeconomics & Governance, Global Economics & Governance Date: October 23, 2019
Load more posts