EU trade in goods surplus with US increases as economic tensions rise

The European Union’s trade in goods surplus with the US grew in January and February compared to a year earlier, a development that could further raise tensions with the Trump administration.

Read more: EU officials given go-ahead to negotiate with Trump on tariffs

Meanwhile, the EU’s trade in goods deficit with China increased, driven by a 10 per cent increase in imports from America’s rival.

In January and February, the EU exported €21.6bn (£18.7bn) more goods to the US than it imported, a 3.3 per cent rise compared to the same two months in 2018.

The EU imported €37.8bn more goods from China than it exported to the country, a rise in the trade deficit of 6.5 per cent year-on-year.

The figures come soon after EU member states voted to open trade negotiations with the US to avert the lingering threat of further tariffs. It slapped levies of 25 per cent on steel and 15 per cent on aluminium imports from the bloc in March 2018.

The Trump administration has long criticised the EU for its trade surplus with the US and wants the bloc to open up to American agricultural goods, something member states say it will not negotiate on.

Last month, President Donald Trump said: “We’re gonna tariff a lot of their products coming in because the European Union treats us very, very unfairly.” Earlier this month the US threatened to put tariffs on $11bn (£8.4bn) worth of EU goods, including French cheese and Italian wine.

The EU has an overall trade deficit with the rest of the world, which increased to €28.4bn in January and February, a year-on-year increase of 37 per cent.

The 19-member bloc that use the euro has a trade surplus, largely driven by the strength of German manufacturing. The Eurozone’s surplus grew one per cent to €19.8bn, compared to €19.6bn in January and February 2018.

Germany’s trade in goods surplus with the rest of the world, including EU countries, grew to €36.3bn in February and March – by far the biggest in the Eurozone – compared to €33.3bn a year earlier.

Read more: US threatens tariffs on $11bn of EU goods

Meanwhile, the UK trimmed its trade deficit with the rest of the world over the same period by 21 per cent. It stood at €28.1bn in January and February.