The Transatlantic Economy 2026

The Transatlantic Economy in 2026

The 2026 transatlantic business continues to thrive. Every day, more than $6.4 billion worth of goods and services are traded between Europe and the United States, of which $4.5 billion (70%) is between the EU and the U.S., underpinned by extensive cross-border investments that support millions of jobs.

2025 was a turbulent year for the transatlantic economy. While a deal at the end of July averted a full‑blown EU-U.S. trade war, the average effective U.S. tariff rate on EU goods increased to 16-18% – a fivefold increase compared to the year before. Despite this turbulence, goods trade flows held strong, services trade quietly continued to grow, and Europe and the United States remained each other’s most important source of overseas affiliate income by far.

Economic growth on both sides of the pond is expected to be cyclically robust in 2026, though the pace will vary. Analysts predict economic growth of 2.5% in the United States and around 1.2% in Europe, with significant variation across countries. In the United States, the massive AI infrastructure buildout and an affordability squeeze are key watchpoints; in Europe, higher energy prices, longstanding barriers inside the Single Market, and vulnerability to China’s export onslaught add to the uncertainty.

The bottom line is unchanged: the transatlantic economy is the world’s largest and most consequential economic relationship. Transatlantic commerce continues to thrive, and this dense web of deep connections remains a strength – not a burden – in a more competitive and disruptive age.

TRADE IN GOODS

• $617 B
  U.S. goods exports to Europe (2025)
• $840 B
  European goods exports to the United States (2025)

Europe and the United States share one of the world’s largest merchandise trade partnerships – an everyday flow of goods that binds supply chains and consumers on both sides of the Atlantic.

TRADE IN SERVICES

• $489 B
  U.S. services exports to Europe (2024)
• $350 B
  European services exports to the United States (2024)

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.

INVESTMENT

• 56%
  Europe’s share of U.S. FDI worldwide (2009–2025)
• 56%
  Europe’s share of all global FDI in the United States by ultimate beneficial owner (2024)

Trade alone fails to paint a full picture of transatlantic commerce; investment is the real backbone of the transatlantic economy. Europe remains by far the primary destination for U.S. investment abroad, and European firms remain the largest source of foreign direct investment in the United States.

TRADE AND INVESTMENT SYNERGIES

• 65%
  Share of U.S. imports from the EU+UK consisting of intra-firm trade (2024)
• 40%
  Share of U.S. exports to the EU+UK consisting of intra-firm trade (2024)

Deep U.S. and European investment ties in each other’s market are another conduit for trade. A great deal of transatlantic trade is intra-firm (related-party) trade that stays within the same company, showing how deeply U.S. and European supply chains are embedded in each other’s markets.

FOREIGN AFFILIATES: GROSS PRODUCT AND ASSETS

• $900 B
  Gross product (output) of European company affiliates in the United States (est. 2024)
• $835 B
  Gross product (output) of U.S. company affiliates in Europe (est. 2024)

U.S. companies in Europe and European companies in the United States are among the largest and most advanced economic forces in the world. Their gross product shows the value they add inside each other’s economies, while their assets show the scale of each side’s footprint.

FOREIGN AFFILIATES: SALES AND INCOME

• $3.5 T
  European affiliate sales in the United States (est. 2024
• $3.9 T
  U.S. affiliate sales in Europe (est. 2024)

U.S. and European companies each make more of their overseas income in each other’s markets than they do in the entire rest of the world. Foreign affiliate sales – not exports – are the primary way U.S. firms serve European customers and European firms serve American customers.

JOBS

• 16,000,000
  Direct and indirect jobs dependent on transatlantic commerce (est. 2024)

Millions of people on both sides of the Atlantic owe their livelihoods to a healthy transatlantic economy. European firms are the leading foreign source of jobs in the United States, and U.S. companies are the leading foreign source of jobs in Europe.

The Future of the Transatlantic Economy: Do Europe and America Still Need Each Other?

In a transatlantic climate marked by trade tensions and questions about the strength of the security partnership, a growing chorus of voices argues that the other side of the Atlantic has become more problem than solution. Some Americans talk as if the United States has little need for Europe; some Europeans say it is time to “de-risk” and become “autonomous” from America.

In fact, there is substantial evidence that Europe and the United States each gain considerably from a flourishing transatlantic economy. Some Europeans are right to want to mitigate excessive dependencies, but wrong to think decoupling from America would cost little; some Americans are right to want Europeans to do more on security, but wrong to think they don’t need Europe.

Europe and America are constituent parts of a densely intertwined $9.8 trillion transatlantic economy and members of the most successful alliance in history – each indispensable to the other. European and American companies not only profit from those interconnections; they use the transatlantic economy as a common geoeconomic base to compete in a fractious world.