Trade relations between the U.S. and the European Union (EU) have hit another rough patch. The Trump administration is threatening to impose additional duties on EU exports worth $11 billion in retaliation to the bloc granting aircraft manufacturer Airbus illegal subsidies.
The World Trade Organization (WTO) ruled that the subsidies had an adverse impact on the U.S. by causing Airbus rival Boeing Co. (BA) to lose sales and that the bloc failed to comply with rulings, paving the way for the U.S. to impose countermeasures. The sanctions amount will be determined by the WTO arbitrator in the coming months.
The list of EU products to be covered by additional duties includes aircrafts, helicopters and fuselages from France, Germany, Spain or the U.K., in addition to a variety of cheeses, fruits, jams, wines and yarns from any of the 28 member States of the bloc.
In July, President Donald Trump met with European Commission President Jean-Claude Juncker at the White House to improve trade relations after Trump had said he will impose a 20% retaliatory tariff on car imports from the EU. The two regions are expected to discuss a new trade deal that removes tariffs on non-auto industrial goods.
The EU is one of America’s largest trading partners, accounting for $806.5 billion worth of goods trade in 2018. While the U.S. exported $318.6 billion worth of goods from the EU, the imports stood at $487.9 billion, making the deficit $169.2 billion, the highest on record according to the Census Bureau.
Top Imports From EU
The top of the list for imports from across the Atlantic Ocean is pharmaceuticals. In 2017, the U.S. pharma imports from EU stood at $71 billion.
Motor vehicle-related imports at nearly $58 billion and accounted for 13.3% of all goods imports from the EU that year. This category includes cars, motor vehicle bodies and trailers and car parts.
Machinery, excluding electrical and computer equipment, was the third-largest component of EU imports for the U.S. at $51.9 billion. This category includes agricultural and industrial machinery as well as engines and turbines.
Top Exports to the EU
In 2017, United States’ largest export to the EU was aerospace products and parts at $39.5 billion. That was followed by computer and electronic parts, worth $33.6 billion, and pharmaceuticals and medicines worth $30.7 billion.
Top State Trade
In terms of the volume of trade, in 2017, California ranked highest in terms of trade volume with the EU, with goods trade worth $67.6 billion, closely followed by Texas with $60.3 billion. New York, New Jersey and Georgia came next in line with trade volumes of $51.9 billion, $40.8 billion and $34.6 billion respectively. Wyoming, South Dakota and Hawaii are states that saw the lowest volume of trade with the EU that year.
Since pharmaceuticals and medicines made up for such a large chunk of imports, it isn’t surprising that New Jersey that is home to many pharma companies led the table with the highest trade deficit with the EU among states in 2017. NJ imports exceeded exports by $22.3 billion. It was followed by Georgia with a deficit of $19.3 billion, New York with $13.8 billion and Tennessee with $11.8 billion.