The Prospects for U.S.–EU Trade in 2019

In the eyes of many European observers, the United States’ imposition of tariffs on a range of products exported by EU countries to the U.S.—and the U.S. threat to impose even more tariffs—has called into question the fundamental free-market principles and shared Western values that have undergirded the postwar transatlantic partnership. Americans for their part have viewed hostile steps by the European Commission against American companies with growing concern. In view of the potential benefits to the American economy from a possible U.S.–UK free trade agreement, the contentious approach to Brexit negotiations by the EU governing bodies has been equally troubling. So is the wider EU approach of imposing costs on producers and consumers by regulations “behind the border” (instead of levying tariffs at the border), a practice that represents a new and ominous twist on traditional non-tariff barriers. This Heritage Foundation Backgrounder presents an in-depth examination of the composition of U.S.–EU trade and how it is affected by tariffs levied by both sides, as well as by European protectionism in high-technology sectors. The recommendations in this Backgrounder aim to end the U.S.–EU trade “war” before the situation deteriorates further.

[To read the full report, click here.]