I know we are all experts on tariffs but I think it is also something of a tempest in a tea kettle. Goods tend to get all the attention, but services are in play as well. I again queried Grok which can do research far faster than I can with respect to the Tariff imbalance between the US and EU. Interesting response.
Yes, there is a tariff imbalance between the United States and the European Union, but it’s not as straightforward as it might seem at first glance. The imbalance exists primarily in specific sectors and depends on how you look at the overall trade relationship.
For goods, the EU tends to impose higher tariffs on U.S. exports than the U.S. does on EU exports. For example, the EU applies a 10% tariff on U.S. passenger car imports, while the U.S. charges just 2.5% on EU cars. However, the U.S. counters this with a much higher 25% tariff on pickup trucks from the EU (and most other countries), which protects its domestic truck market. On average, though, the EU’s tariffs on U.S. goods are slightly higher—around 4-6%—compared to the U.S. average of 3-4% on EU goods. This difference has been a point of contention, especially in industries like automotive and agriculture, where the EU also restricts U.S. exports through non-tariff barriers like stringent regulations on things like meat and dairy.
That said, the picture changes when you include services, not just goods. The U.S. enjoys a significant trade surplus with the EU in services—think finance, tech, and intellectual property—while the EU has a surplus in goods. Overall, the trade relationship is more balanced than the goods-only tariff numbers suggest, with the total imbalance hovering around 3% of their trade volume, or roughly $50 billion, depending on the year.
Recent news highlights this tension. In February 2025, U.S. President Donald Trump announced plans for 25% tariffs on EU goods, arguing the EU has been “unfair” and pointing to the goods deficit. The EU has pushed back, calling these measures unjustified and threatening retaliation, while also offering to negotiate lower tariffs, like reducing its 10% car tariff to match the U.S. 2.5%. Historically, both sides have kept tariffs low—averaging under 4%—since they’re bound by World Trade Organization rules, but sector-specific differences fuel the perception of imbalance.
So, yes, there’s an imbalance in tariffs for certain goods, but it’s exaggerated when you ignore services and the broader trade context. Both sides have their protectionist quirks—EU car tariffs and U.S. truck tariffs being prime examples—and the real story is more about political leverage than pure economics.
As
@Wheels notes, I frankly think VAT, at least with respect to competitive goods (autos for instance), is the real culprit. I think that unfair charging practice sometimes is lost upon Europeans because it is part of the EU economic system, rather than a specific targeted import charge.