Two years after President Biden resolved to put an end to rancorous trade disputes with Europe, the U.S. has imported more goods from Europe than from China, but the EU fears that the President’s green energy subsidies package, which provides tax breaks for US companies, will put EU companies at a disadvantage.
British and European products are flooding across the Atlantic as never before with U.S/UK trade increasing 15% year on year, which is pushing East Coast container volumes ahead of West Coast ports, after years of a U.S. pivot to Asia.
Ocean freight capacity deployed on the trans-Atlantic trade has been outstripping demand, encouraging shipping lines to inject more capacity and take advantage of elevated rates, which has seen lines earn $2.18 per nautical transatlantic mile, which is way above the $0.73 per nautical mile carriers saw on Shanghai–Europe routes.
Despite the additional capacity coming on stream, rates are being supported by congestion soaking up so much of the available capacity, with 22 ships at anchor waiting for a berth at the Port of Savannah at the end of last week, while the Port of New York and New Jersey reported four ships at anchor
Germany’s exports to the U.S. surged by almost 50% year-over-year in September, while the U.S. is becoming one of Europe’s biggest energy and military suppliers, replacing Russia as a natural-gas purveyor.
The U.S., which is the UK’s largest trading partner, is becoming particularly attractive to European firms in the current geopolitical context and with Europe facing a major energy crisis and inflation, access to cheap oil and gas, skilled workers and government support to build clean-energy infrastructure is compelling.
The U.S. received foreign direct investment worth $74 billion in the three months through June, by far the highest of any country, and compared with $46 billion for China, according to an October report by the Organization for Economic Cooperation and Development.
European foreign direct investment in the U.S. increased by 13.5% and the UK’s foreign direct investment (FDI) in United States accounted for 24.1% of the total UK outward FDI stock, with investment from the U.S. in the UK at similar levels.
The U.S. economy still has considerable momentum and it is on course to import goods and services worth $4 trillion this year, around one-third more than in 2019.
The Port of New York and New Jersey was the nation’s busiest container port in September for the second month in a row, handling 35% more cargo than in September 2019.
Europe received almost three times as many international visitors in the first seven months of the year as during the same period in 2021, boosted by travel from the U.S., with the sale of Italian luxury-goods soaring 74% in the three months through September.
Increasing trans-Atlantic trade isn’t without its challenges, with protectionist policies on both sides of the Atlantic. The U.S.’s new tax incentive program for electric vehicles has triggered strong protests from Europe, who say the policy discriminates against their manufacturers, at a time when closer cooperation is required on supply chain resilience.
While governments protest, European companies, from solar-panel makers to battery manufacturers, are rushing to take advantage of the new U.S. subsidies and the U.S. and EU are set to work together to agree global standards for emerging technologies, which would benefit companies in both regions, including domestic semiconductor manufacturing.
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