One year on from ‘Liberation Day’, the transatlantic economy still stands strong – but it needs stability

Authored by Malte Lohan, CEO, AmCham EU

Blog
2 Apr 2026
Trade, Transatlantic, Trade tensions

Authored by Malte Lohan, CEO, AmCham EU

After the United States announced its reciprocal tariffs last April, EU-US trade has experienced a year of uncertainty that continues to shape business decisions today. Markets reacted. Companies adapted. Escalation gave way to the promise of stabilisation, then back again. And through it all, the world’s most integrated economic relationship was put through a stress test. 

So, what did all this volatility mean for the health of the transatlantic economy over the past year? 

Overall, despite the political headwinds, the undercurrents of transatlantic commerce appear to have held firm. The Transatlantic Economy 2026, our annual study offering the latest insights on jobs, trade and investment between Europe and the United States, finds that trade in goods between Europe and the US actually hit a new record high of $1.46 trillion in 2025. At the same time, American companies recorded estimated sales of $3.9 trillion in Europe – another all-time high – while European companies recorded sales of $3.5 trillion in the US. Transatlantic services trade continued to post gains too. 

These figures do not happen by accident. They reflect the sheer scale and interconnectedness of this $9.8 trillion commercial relationship, built on decades of mutual foreign direct investment (FDI). US FDI stock in Europe stands at $4 trillion; European FDI stock in the US stands at $3.6 trillion. And this investment has an impact on the bottom line: in the first nine months of last year, Europe accounted for 58.8% of total income earned by US subsidiaries around the world. 

In short, here we are, a year later, still trading, still investing, still interlinked in ways that no other economic partnership in the world can match.  

That is not to downplay the risks. When you dig underneath some of the headline figures from the last year, you see signs of strain. The 2025 trade in goods numbers, for instance, are a tale of two halves. Companies did what they always do: adapt. To avoid the uncertainty of potential tariffs, businesses importing from Europe to the US frontloaded their shipments. This meant that while US imports had risen by 30% compared to 2024 up to June, this increase levelled out to a more modest 9% by the end of the year. US affiliate sales growth in Europe should also be read with some caution, as exchange rate shifts – particularly a stronger euro – played a role in inflating top-line numbers. 

The point is there can be no room for complacency. A thriving transatlantic economy benefits Europe and the US alike. At a moment when economic resilience, supply chain dependencies and shifting security realities are central to policy debates on both sides of the Atlantic, it is worth recalling that European and American companies are strongest – and most competitive globally – when they can rely on the scale of the transatlantic economy.  

The good news is that transatlantic trade relations are heading towards a more constructive place. Following the European Parliament’s vote to approve tariff reductions for certain imports from the US, it looks like the EU is now moving forward with the agreed steps to implement the July 2025 EU-US Framework Agreement. This is a process that should help to put the transatlantic trade and investment relationship back on firmer footing. 

The EU-US Framework Agreement is not perfect, but it beats unrelenting trade tensions. AmCham EU opposes broad-based tariffs for the disruption they pose to supply chains and the costs they raise for businesses and consumers. However, given political priorities on both sides, this Framework Agreement still provides the most realistic path to a more constructive EU-US trade and investment climate that helps businesses plan ahead. 

The Framework Agreement is about more than just tariffs. The deal also envisages cooperation in a range of critical areas like advancing more resilient critical mineral supply chains, coordinating on export controls, tackling non-market trading practices and accelerating mutual recognition agreements in cybersecurity, semiconductors and pharmaceuticals. These opportunities identified last summer still align with business imperatives on both sides of the Atlantic today. 

In the end, the transatlantic economy is too important and mutually beneficial to allow the next 12 months to be as unpredictable as the last. With the geopolitical and security environment becoming increasingly unsettled, the last thing companies need is more uncertainty around transatlantic trade and investment. Opportunities for cooperation in line with the Framework Agreement are a bridge that can turn a year of turbulence into a turning point – one where Europe and the United States recommit to the partnership that underpins both of their economic futures. 

The Transatlantic Economy 2026

Following a year of political and trade tensions between Europe and the United States, commercial ties between the two sides – the deepest and broadest between any two regions in history – have held remarkably strong. In a new study, authors Daniel Hamilton, Senior Fellow at the Foreign Policy Institute of Johns Hopkins University’s Paul H. Nitze School of Advanced International Studies, and Joseph Quinlan, Senior Fellow at the Transatlantic Leadership Network, value the transatlantic economy at a record $9.8 trillion in 2025, up from $9.5 trillion the previous year. This figure comprises an estimated record $2.3 trillion in goods and services trade between Europe and the United States and $7.5 trillion in combined affiliate sales. 

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