EU trade surplus with US hits €200bn as exports climb

The European Union exported €554.0 billion worth of goods to the United States and imported €354.4 billion during 2025, resulting in a €199.6 billion trade surplus, according to Eurostat.

Compared with 2024, both exports and imports increased by 3.4 per cent and 4.8 per cent respectively, reflecting continued strength in transatlantic trade.

In the first quarter of 2025, imports from and especially exports to the United States rose significantly, before recording a marked decline in the second quarter.

In the third quarter, imports edged up slightly while exports registered a modest decrease.

In the fourth quarter, both exports and imports declined, signalling a cooling of momentum towards the end of the year.

A breakdown by Standard International Trade Classification categories showed that the top five most exported product groups in 2025 accounted for 53.0 per cent of all EU exports to the United States.

Medicinal and pharmaceutical products led exports with a 29.0 per cent share, followed by road vehicles at 7.5 per cent, general industrial machinery and equipment at 5.9 per cent, electrical machinery, appliances and electrical parts at 5.8 per cent, and power generating machinery and equipment at 4.8 per cent.

On the import side, the top five categories represented 52.1 per cent of all goods imported from the United States.

Medicinal and pharmaceutical products also topped imports with 17.0 per cent, followed by petroleum and related materials at 11.2 per cent, power generating machinery and equipment at 9.4 per cent, natural and manufactured gas at 7.9 per cent, and other transport equipment at 6.6 per cent.

The scale and composition of EU US trade underline the strategic importance of the American market for Europe, including for member states such as Cyprus whose financial and investment links extend deeply across the Atlantic.

The Central Bank of Cyprus (CBC) in January published its annual Foreign Direct Investment report for 2024, showing that the United States remained one of Cyprus’ key FDI partners, alongside dominant European counterparts.

The report provided a comprehensive overview of FDI stocks, transactions, income, geographical distribution and sectoral activity, mapping the island’s exposure to major global economies.

While Europe remained Cyprus’ largest foreign direct investment partner in 2024, the United States featured prominently among the leading counterpart countries for both inward and outward investment positions.

The report showed that net FDI stock remained in negative territory in 2024, declining to €41.86 billion from €34.86 billion in 2023, meaning inward FDI continued to exceed outward FDI.

This shift reflected a sharper fall in outward FDI stock, which dropped to €331.75 billion in 2024 from €366.00 billion a year earlier, mainly due to lower equity instruments, while debt instruments also decreased.

Equity accounted for 89 per cent of outward FDI stock in 2024, with debt instruments making up 11 per cent.

Inward FDI stock also declined, reaching €373.62 billion in 2024 compared with €400.86 billion in 2023, largely driven by lower equity holdings, although debt instruments recorded a slight increase.

Equity represented 94 per cent of inward FDI stock in 2024, while debt instruments accounted for 6 per cent.

The central bank explained that the parallel movements in inward and outward FDI were linked to the significant presence of special purpose entities, whose cross border assets and liabilities tend to move in tandem due to limited interaction with the domestic economy.

Net FDI transactions remained negative for the sixth consecutive year in 2024, amounting to €5.11 billion in net outflows.

Outward FDI transactions reached €22.47 billion in net outflows, while inward FDI transactions stood at €17.36 billion in net outflows, partly offset by positive reinvested earnings and debt instruments.

Net FDI income also remained negative at €3.43 billion in 2024 compared with €2.62 billion in the previous year, indicating that income paid to foreign investors exceeded income earned abroad.

Both inward and outward FDI rates of return strengthened to 7.8 per cent in 2024 from 6.7 per cent in 2023, with a near perfect correlation between the two over the 2018 to 2024 period.

From a regional perspective, Europe accounted for the bulk of both inward and outward stocks.

Russia remained the single largest partner country overall. The United States, Luxembourg and the United Kingdom also ranked among the leading counterparts depending on the measure used.

For the first time, the report analysed inward FDI based on the ultimate investing economy, showing Europe as the primary source at €212.87 billion, followed by America at €87.28 billion.

Most FDI stock remained concentrated in the tertiary sector, particularly financial and insurance activities, underlining Cyprus’ role as a financial services hub closely connected to both European and US capital flows.