What's the truth about the US, UK and EU goods trade.
In 2018 the EU27 earned almost $175 BILLION dollars net from the US in goods trade. Yet the UK is the biggest buyer of US goods in the EU, and the US even made a profit.
The truth about the trade between the US and the EU, and the US trade with the EU when the UK will no longer be part of it. The results might surprise readers. I think this information will also surprise many citizens of the US as well.
This is official data from the US Census Bureau for 2018, as this is official information and it will appeal to our US readers.
- There are 28 countries in the EU
2. Almost 21% of all US goods exported to the EU were bought by the UK alone
3. The EU market will be over 1/5th smaller when the UK leaves
4. The EU27 countries (minus the UK) had a $174.2 BILLION trade surplus in goods with the USA last year
5. The UK is the biggest customer for US goods — and the US even made a small profit on the trade
6 The same cannot be said for the trade the US does with the EU27 (EU minus the UK)
One country out of the 28 countries in the EU — the United Kingdom — bought over 1/5th of all American products sold to the EU last year. One country out of 28. And that country is almost 21% of the market for US producers.
Another way of looking at this is to say that for the USA, the EU market will be 79% of its current size once the UK leaves.
The UK buys American and the US buys British
The other key aspect for the US is the trade balance. For many years the EU has sold far more to the US than vice versa. Last year the EU27 countries rejoiced in a trade surplus with the US of almost $175 BILLION dollars. That’s $175 billion dollars in just one year, and that has been typical.
Conversely, the US had a small positive trade balance in goods with the UK of $5.5 billion dollars. In other words, the UK and the US broadly trade with each other on an even basis when it comes to goods.
Yet the US trade deficit with the EU27 will be huge when the UK leaves the EU.
And what about defense (or “security” as the EU refers to it)?
On defense, the UK is the only EU country to meet both NATO minimum spending targets — the percentage of GDP to be spent on defense and the capital equipment budget. Five EU countries are not even members of NATO and contribute nothing at all. The EU’s largest country — Germany — is still only contributing two-thirds of what it should be doing.
Not only are the EU27 earning huge sums from the trade with the USA these EU countries are also failing to pay for their own defense, relying on the USA and to a lesser degree the UK to protect them.
It would not be an exaggeration to say that when it comes to defense the EU has been sucking from the US teat for decades.
On the other hand, the US-UK trade in goods is healthy and broadly in balance. The UK is also paying its way in NATO, even though we would like to see even more investment.
Brexit will bring even more opportunities for a stronger trade relationship with the USA, as well as with Commonwealth partners across the globe.
Getting the message yet why the EU are loathing the idea that we are leaving?
[ Sources: US Census Bureau | NATO ]