EU-US Cooperation on Trade and Economic Security: Speech by EU Commissioner Šefčovič

Thank you for your warm welcome and for hosting this timely discussion.

It has been almost exactly a year since I last visited Washington, D.C. In fact, I realised that I have been here every February since 2022 – when Russia invaded Ukraine –each time marking a significant moment in our relationship.

This year is no different, as I am here to address a critical issue: the U.S. administration’s proposal to impose tariffs on EU exports.

This has sparked concerns about the state of our transatlantic partnership, prompting some to wonder whether it is temporarily under the weather.

Last year, I quoted the American industrial pioneer, Henry Ford, who said: “Coming together is a beginning, keeping together is progress, working together is success.” These words resonate even more strongly today.

The European Union is built on free trade among its members, and our commitment to opening up world trade is deeply embedded in our DNA. It should therefore come as no surprise that the EU is the world’s largest trading bloc.

We have free trade agreements with 76 countries and are the leading trading partner for 72 nations, accounting for 38% of global GDP.

So, we know a thing or two about trade.

The EU is also the United States’ most important trading partner. Over the past decade, EU-U.S. bilateral trade in goods and services has doubled, surpassing $1.7 trillion in 2023.

Put simply, the EU-U.S. economic relationship is the largest in the world. Together, we represent nearly 30% of global trade, with daily exchanges worth over $4.5 billion.

This unique bond benefits both sides of the Atlantic. It is the very definition of a win-win partnership, and there is nothing unfair about it.

Let me give you a few examples:

• Boeing and Airbus build civil aircraft in the U.S. with cutting-edge electronics, power systems and fuselages from European companies.
• U.S. battle tanks and armoured fighting vehicles rely on EU technology, such as drivetrains and cannons.
• U.S. semiconductor production depends on EU-made lithography machines.
• Even the U.S. Mint uses EU-made high-tech printing machines to print U.S. dollars and prevent counterfeiting.

The EU too is a massive market for American products.

For example, 50% of our LNG imports come from the U.S., and in return, Europe is your largest LNG export market, accounting for over 60% of U.S. LNG exports—double the U.S. flows to Asia.

In 2019, I had the privilege of joining President Trump at the opening of an LNG export terminal in Hackberry, Louisiana. I also worked closely with U.S. LNG producers to spearhead our pioneering joint gas purchases, designed to replace Russian gas supplies.

It is true that the EU enjoys a relatively small trade surplus, but let me put this into perspective:

• The surplus represents only 3% of our total bilateral trade—$50 billion out of $1.7 trillion. This is a small fraction – a drop in the ocean, if you will – of our overall economic exchanges.
• The U.S. enjoys a large trade surplus in services, from financial services to streaming platforms and social media. Even a Tesla car is full of services. The EU imports twice as many digital services from the U.S. as from all of the Asia-Pacific region.

Thus, the deficits in goods and services nearly balance out. This reflects the natural structure of our economies, driven by the preferences of European and American consumers.

It is simply a market-driven allocation of resources, and this is what well-functioning international trade is all about—benefiting both parties. Neither side is losing out. We are both gaining.

When it comes to investment, the numbers are just as impressive.

EU foreign direct investment in the U.S. totals $2.8 trillion, a figure ten times greater than EU investment in India and China combined.

European companies are the largest foreign investors in the U.S., contributing capital, jobs, and technology. They employ 3.5 million people on American soil and pay taxes into the U.S. budget.

So, while the late Madeleine Albright called the U.S. the “indispensable nation,” one could argue that, given our mutual interdependencies, the EU and the U.S. share an indispensable partnership.

Now, let’s address the pressing issue—tariffs.

I am reminded of the words of President Ronald Reagan, who said: “We’re in the same boat with our trading partners. If one partner shoots a hole in the boat, does it make sense for the other one to shoot another hole in the boat? […] We should be working together to plug them up.”

He advocated for free markets and fair trade, emphasising their importance for both economic prosperity and political stability.

We often hear claims that the EU imposes higher tariffs on imports than the U.S. But the data tells a different story.

The EU is one of the most open economies in the world, with over 70% of imports entering at zero tariff.

With regard to our EU-US trade relations, the overall picture is very balanced, providing a robust level playing field for businesses on both sides of the pond.

• The average EU duty on U.S. goods is 0.9%, whereas EU exports to the U.S. face an average tariff of 1.5%.
• For certain products, the level of duties varies, but tariff peaks exist on both sides. For example, the EU has a peak tariff on cars, while the U.S. has a peak on trucks.
• In some sectors, U.S. tariffs are higher. For example, U.S. agri-food products face a 3.5% tariff when entering the EU, while EU agricultural products are subject to a 5.7% tariff in the U.S.

Given these facts, the EU sees no justification for sudden, unilateral tariff increases by the U.S.

Our businesses rely on economic stability, predictability and certainty on both sides of the Atlantic. If the U.S. imposes tariffs on EU products, it would create unnecessary barriers to European exports, harming businesses and workers on both sides.

Therefore, to protect European interests, we will have no choice but to respond firmly and swiftly. But we do hope to avoid that scenario – meaning the unnecessary pain of measures and counter measures – and remain committed to constructive dialogue.

That is why I am here this week.

Once more, paraphrasing Ronald Reagan: “Commerce is not warfare; it is an economic alliance, benefiting both countries […] and peaceful trading partners are allies, not enemies.”

So, the EU remains convinced that free and fair trade is worth fighting for. And in this context, we will continue to shape our own destiny. With a clear plan, and a clear sense of urgency, the EU is focused on unleashing the potential of our economy.

First, competitiveness is front and centre in these efforts.

We plan to increase production within the EU – and this goes for both energy-intensive industries and clean-tech sectors.

There are no electric cars without steel and without batteries, while there are no batteries without chemicals or processed critical minerals. It is simple as that.

Second, trade remains at the core of our alliances.

We are actively expanding our network of trade agreements, most recently updating our relationship with Switzerland, finalising the EU-Mercosur partnership, modernising the EU-Mexico trade agreement and relaunching negotiations with Malaysia.

We are also pursuing negotiations with India, Indonesia, Thailand, and the Philippines, while exploring opportunities with Gulf countries.

Overall, we see clear momentum. In uncertain times, many countries seek continuity, stability, and predictability in their trade partners—and they turn to us.

Third, our openness does not mean we will not protect our interests and our European market when necessary.

Make no mistake: as we expand our trade network, we also invest considerable thought, time, and effort into strengthening our trade defence instruments and enhancing our toolbox for economic security.

For instance, we have the Anti-Coercion Instrument to protect the EU from economic coercion by third countries. The range of countermeasures is broad and can be deployed swiftly, including import and export restrictions, limitations on access to the EU market, and more.

We are also revising our Foreign Direct Investment screening regulation to help us address risks to the EU’s security and public order.

We are taking steps to prevent EU outbound investments—such as in semiconductors, artificial intelligence, and quantum technologies—from negatively impacting the economic security of the EU by ensuring that key technologies and expertise do not fall into the wrong hands.

With all these steps, we are sending a clear signal to our industries: the EU is an excellent place to do business, and we want you to thrive.

And by the way, this signal is not only for EU businesses. Europe is open for American trade and investment, and we believe we have a very attractive offering to help your fantastic companies expand, creating American jobs and American wealth.

I will be making this point to my American counterparts when I meet them later today. The EU is interested in making deals – deals that foster fairness, burden-sharing and mutual benefits.

To conclude, it is worth reiterating that the transatlantic bond is the most natural for us. I firmly believe that it makes sense for both the EU and the U.S. to work together to strengthen this relationship and expand it into new areas.

So, let’s continue to make our trade and investment relationship— one-of-a-kind, truly unique on the global stage—great. As you say here in America, if it ain’t broke, don’t fix it.

Thank you.

Source – EU Commission