EU Trade Surplus Shrinks 60% as US Exports Fall Due to Tariffs

US tariffs drive steep drop in EU exports for second month

Impact and Analysis of US Tariffs on EU Exports

By Philip Blenkinsop

BRUSSELS, April 17 (Reuters) - European Union exports to the United States dropped by more than a quarter for a second consecutive month in February, but may be exaggerating the impact of President Donald Trump's tariffs, given they follow a year-ago period when front-loading began.

Exports from the 27-nation European Union to the United States fell by 26.4% in February, EU statistics agency Eurostat said on Friday, following a 27.8% drop in January, and contributing to a 60% reduction in the EU's trade surplus.

The figures though are likely distorted by their comparison with the unprecedented trade of early 2025, when shipments peaked ahead of Trump's tariffs from March. In January and February 2025, exports to the United States rose by respectively 16.0% and 22.4%.

Evaluating the True Impact of Tariffs

Assessing the real impact of U.S. tariffs is not simple. Economists tend to see the fourth quarter of 2025 as a more reliable gauge, with an EU-U.S. deal in place, although the euro's 8.9% average appreciation against the dollar from a year earlier will also have hit.

Q4 DROP OF 15% SERVES AS GUIDE

In the fourth quarter, EU exports to the United States were down 15%, iron and steel exports nearly 40% lower and chemicals off by 60-80%, albeit after significant front-loading earlier in the year.

Expert Opinions and Economic Outlook

Commerzbank economist Vincent Stamer noted that EU exports to other destinations increased - Eurostat puts that figure at 6.1% - and cautioned that the damage was likely to get worse.

"Past episodes of tariff hikes have shown us that it takes trade flows two to three years to fully respond to new tariffs," he said.

New tariffs on patented pharmaceuticals, a major EU export, will also weigh, Stamer said, adding Commerzbank had calculated that U.S. tariffs will likely reduce the euro area GDP by 0.3% in 2026 alone.

Sector-Specific Effects

Automotive and Chemicals

Car producers in the EU were by the October-December period benefitting from a U.S. tariff reduced to 15% from 25%, but exports were 22% lower, albeit not as sharp a drop as in the second and third quarters.

ING research shows that U.S. chemicals and transport equipment exports to the EU also rose from early 2024 to late 2025 and noted that the share of the United States of overall EU exports fell from early 2024 to late 2025 in all major countries except France.

Metals and Raw Materials

However, EU exports of aluminium and copper and copper products, despite facing 50% U.S. tariffs, increased by respectively 9% and 15% in the final three months of last year.

The aluminium increase was partly to cover a technical issue at a U.S. plant, industry group European Aluminium said. For copper, the U.S. simply does not have sufficient domestic capacity to cover demand, leading to prices that meant EU exports made sense even with the tariff, sector association European Metals said.

Shipbuilding and Boating

Ships and boats though were the standout, more than tripling in the fourth quarter after nearly tripling in the third.

Meyer Turku shipyard in Finland, owned by the German Meyer family, said the U.S. tariffs had not had a "decisive impact". It delivered one of the world's largest cruise ships, "Star of the Seas", to Royal Caribbean [RCL.N] last year and secured an agreement for shipbuilding reservations with the operator until 2036.

The European Boating Industry, representing yachts and pleasure boats, said sales to the United States had spiked in June, but slipped afterwards, though not to a level that might have been expected due to tariffs, perhaps because deliveries related to orders from some time in the past.

Recent Developments and Future Outlook

On February 20, the U.S. Supreme Court struck down Trump's sweeping tariffs, which he had pursued under a law meant for use in national emergencies. But only days later, the U.S. imposed a new temporary global import levy and is planning to reconstruct tariffs to replicate those agreed with the EU last year. 

(Reporting by Philip Blenkinsop; additional reporting by Anna Kauranen in Helsinki; editing by Joe Bavier and Chizu Nomiyama )