THE
TRANSATLANTIC
ECONOMY 2025
Annual Survey of Jobs,
Trade and Investment between
the United States and Europe
Daniel S. Hamilton and Joseph P. Quinlan
Introduction
The transatlantic relationship is the most mutually beneficial on earth. While the $9.5 trillion Europe-US economy faces several hurdles in 2025, from trade disputes to challenges from China, it does so with strong momentum following a year marked by all-time highs.
Even in testing times, the Europe and the US remain each other’s most important markets and geo-economic base.
1. Peril and promise
2025 is a year of peril and promise for the transatlantic economy. Tensions abound, including transatlantic trade disputes, disruptive politics, dramatic energy shifts, supply chain uncertainties, raw materials scrambles, challenges from China, and Russia’s ongoing aggression against Ukraine and other neighbours. Yet the transatlantic economy faces these tests following a remarkably robust year.
Real economic growth is expected on both sides of the Atlantic, yet absolute and per capita growth rates will be uneven. The US expected to expand by 2.7%, while Europe faces a more modest 1% growth rate. Trade tensions along with structural challenges on both sides, from inflationary pressures in the US to regulatory and energy cost burdens in Europe, add to the uncertainty.
However, opportunities for growth remain. The transatlantic economy is not just the world’s largest commercial partnership – it is also its most consequential. If both sides align on key priorities, they can reinforce their leadership in a competitive global economy.
2. The ties that bind the transatlantic economy
01 Goods trade
The United States and the European Union are key partners when it comes to international trade in goods.
Key figures:
- US goods trade with Europe broadly defined was $1.3 trillion in 2024. Most of that consisted of US goods trade with the EU+UK of $1.1 trillion. US goods exports to Europe reached a record high of $504 billion, and US goods imports from Europe a record $770 billion.
- US-EU goods trade reached a record high of $976 billion in 2024, 60% percent higher than US-China goods trade ($583 billion) and 20% percent higher than EU-China goods trade ($786 billion).
- The US exported $370 billion in goods to the EU and imported $606 billion in 2024. This generated a US trade deficit in goods with the EU of $236 billion, about $27 billion more than its 2023 trade deficit of $209 billion.
02 Services trade
The United States and the European Union are the two largest traders of services in the world and each other’s most important services trading partners.
Key figures:
- US-EU services trade totaled an estimated $475 billion in 2024, comprised of US services exports of $275 billion and services imports of $200 billion, resulting in a US surplus in services trade with the EU of $75 billion.
- Europe accounted for 42% of US services trade with the world in 2023. The EU accounted for 25% of this European figure; the UK, Switzerland and other non-EU countries represented another 17%.
03 Investment
Mutual investment dwarfs trade and is the real backbone of the transatlantic economy
Key figures:
- The US and Europe are each other's primary source and destination for foreign direct investment. Together they accounted for 60.3% of the global inward foreign investment stock and 62.5% of outward stock in 2023.
- In 2023, US foreign direct investment (FDI) stock in Europe on a historic cost basis stood at $4 trillion; Europe’s FDI stock in the United States stood at $3.5 trillion.
- More US foreign direct investment goes to Europe than to the entire rest of the world. From 2009 to 2023 Europe accounted for 56% of US global FDI outflows, far ahead of the Asia-Pacific (17%), South and Central America and the Caribbean (13%), USMCA partners Canada and Mexico (12%), and Africa and the Middle East (2%).
04 Trade and investment synergies
Deep US and European investment ties in each other’s market are another conduit for trade.
Key figures:
- 64% of US imports from the EU+UK consisted of intra-firm trade in 2023 – much higher than US intra-firm imports from Asia-Pacific nations (around 40%) and well above the global average (48%). Percentages are notably high for Ireland (90%), as well as for Germany and the Netherlands (68% each).
- US-based foreign firms generated $469 billion in US exports to the world in 2022; European firms accounted for 59% of the total.
05 Affiliate output and assets
The total output of US company affiliates in Europe and of European company affiliates in the United States is greater than the total gross domestic product of most countries.
Key figures:
- Combined estimated output of US foreign affiliates in Europe ($825 billion) and of European foreign affiliates in the US ($850 billion) in 2023 of $1.68 trillion was larger than the total output of countries such as Spain, Indonesia, or Turkey.
- US foreign assets in Europe totaled an estimated $19.2 trillion in 2023. That represents roughly 64% of corporate America’s global footprint.
- Total assets of European affiliates in the United States were valued at an estimated $9.3 trillion in 2023.
06 Affiliate sales and income
Foreign affiliate sales – not exports or imports – are the primary means by which US and European firms deliver goods and services to each other’s markets.
Key figures:
- Total transatlantic affiliate sales, estimated at $7.2 trillion in 2023, easily rank as the most integrated commercial partnership in the world.
- Sales of US affiliates in Europe of $3.9 trillion in 2023 were 4 times more than US exports of goods and services to Europe of $946 billion; estimated European affiliate sales in the US of $3.3 trillion in 2023 were more than triple US imports of goods and services from Europe.
07 Jobs
Europe and the US are by far the most important source of onshored jobs in each other’s market.
Key figures:
- The transatlantic economy employs more than 16 million workers in mutually onshored jobs on both sides of the Atlantic.
- European majority-owned affiliates directly employed an estimated 5.3 million US workers in 2023.
- US affiliates have added roughly 1 million more European workers to their payrolls since the century began, bringing the total to an estimated 4.6 million in 2023.
08 Innovation
The transatlantic innovation ecosystem is growing in importance as the race for future technologies accelerates.
Key figures:
- Europe accounted for roughly 53% of global R&D spending by US affiliates worldwide.
- R&D spending by all foreign affiliates in the United States totaled $80.3 billion in 2022. European affiliates spending amounted to $56.2 billion, or 70% of the total.
09 Digital
The transatlantic digital economy – under the sea, on the land, and in the air – is the largest, densest, and busiest in the world.
Key figures:
- Europe and the United States accounted for two-thirds of global exports of digitally delivered services in 2023.
- The US exported $320 billion in digitally-deliverable services to Europe in 2023 – 49% of all US digitally-deliverable exports to the world
- European companies provided 81% of the $176 billion in information services supplied in 2022 by all foreign affiliates based in the United States
- Transatlantic data flows account for more than half of Europe’s data flows and about half of US data flows globally.
10 Energy
The transatlantic energy innovation economy is thriving.
Key figures:
- The US accounted for 48% of Europe’s LNG supplies in 2024, up from 27% in 2021.
- European companies accounted for almost three-quarters of FDI greenfield investments in the US energy sector over the past decade. German investors lead with 20% of the total, followed by French investors (14%).
- The US accounts for 42%, and the EU for an additional 22%, of global cleantech venture capital, each ahead of China’s 14% share.
3. The transatlantic economy and the world
As the world grapples with geopolitical shifts, Europe and the US are reassessing their economic dependencies. The war in Ukraine has prompted unprecedented economic cooperation between the US and Europe, with sanctions on Russia and efforts to secure energy independence reshaping global trade dynamics. At the same time, both economies face critical vulnerabilities in their reliance on China for essential goods, from rare earth materials to pharmaceuticals.
As the US and Europe work to “de-risk” their supply chains and secure strategic industries, they are increasingly turning toward each other – strengthening transatlantic trade, investment and energy flows.
Despite frequent claims that the US and Europe are drifting apart, the data tells a different story. Europe and America maintain economic ties with many global partners, but no relationship is stronger or more deeply integrated than the transatlantic bond.
Transatlantic trade far exceeds US-China or EU-China trade, and transatlantic investment dwarfs that of any other global partnership. As geopolitical uncertainty rises, the transatlantic economy remains the most stable and mutually beneficial commercial relationship in the world.
AmCham EU speaks for American companies committed to Europe on trade, investment and competitiveness issues. It aims to ensure a growth-orientated business and investment climate in Europe. AmCham EU facilitates the resolution of transatlantic issues that impact business and plays a role in creating better understanding of EU and US positions on business matters. Aggregate US investment in Europe totalled more than €3.7 trillion in 2022, directly supports more than 4.9 million jobs in Europe, and generates billions of euros annually in income, trade and research and development.
This study is supported by AmCham EU and the U.S. Chamber of Commerce. Additional partners include American Chambers of Commerce in Belgium, Denmark, Finland, Greece, Italy, Luxembourg, Spain and Sweden. The research was conducted independently by Daniel S. Hamilton and Joseph P. Quinlan at the Foreign Policy Institute at John Hopkins University’s School of Advanced International Studies and the Transatlantic Leadership Network.